Oil Stocks Losing Appeal: Analysts Downgrade CNQ and SU
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5d ago
0mins
Source: seekingalpha
- Market Uncertainty: Analysts highlight that Canadian heavy oil miners like Canadian Natural Resources (CNQ) and Suncor Energy (SU) saw significant stock declines following Maduro's overthrow, reflecting market concerns about their future, particularly amid a crash in Western Canadian Select (WCS) prices.
- Increased Competition Risk: With Venezuelan crude potentially returning, CNQ and SU, which send about a third of their daily output to U.S. Gulf Coast refineries, may face direct competition, further impacting their market share and profitability.
- Small Company Risks: Analyst Long Player warns that current economic uncertainty could lead to longer recovery times for smaller oil and gas companies like HighPeak Energy (HPK) and Prairie Operating (PROP), especially with weakening commodity prices, prompting investors to be cautious with stocks under $1 billion market cap.
- Investment Strategy Shift: Given the political uncertainty and unclear economic outlook, analysts recommend avoiding investments in small-cap oil and gas stocks, particularly those without income like New Era Energy & Digital (NUAI), to mitigate investment risks.
Analyst Views on CNQ
Wall Street analysts forecast CNQ stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CNQ is 40.27 USD with a low forecast of 33.66 USD and a high forecast of 62.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
4 Buy
4 Hold
0 Sell
Moderate Buy
Current: 34.100
Low
33.66
Averages
40.27
High
62.00
Current: 34.100
Low
33.66
Averages
40.27
High
62.00
About CNQ
Canadian Natural Resources Limited is a senior crude oil and natural gas production company. The Company has operations in its core areas located in Western Canada, the United Kingdom portion of the North Sea and Offshore Africa. Its Oil Sands Mining and Upgrading segment produces synthetic crude oil through bitumen mining and upgrading operations at Horizon Oil Sands (Horizon) and through the Company's direct and indirect interest in the Athabasca Oil Sands Project (AOSP). Within Western Canada in the Midstream and Refining segment, the Company maintains certain activities that include pipeline operations, an electricity co-generation system and an investment in the North West Redwater Partnership (NWRP), a general partnership formed to upgrade and refine bitumen in the Province of Alberta. Its Pelican Lake asset is a large, contiguous, shallow, medium crude oil pool. It produces natural gas in western Canada and has a significant land base in both the Montney and Deep Basin.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
