Canadian Natural Resources (CNQ) Stock Is Higher Today as Oil Prices Rebound

NEW YORK (TheStreet) -- Shares of Canadian Natural Resources (CNQ) were gaining 4.5% to $31.54 Friday as oil futures increased, rebounding from recent five-year lows.

Brent crude oil for February delivery gained 4.4% to $61.90 a barrel Friday afternoon, after hitting a five-year low of $58.50 earlier in the week. WTI crude oil for January delivery gained 4.5% to $56.52 a barrel.

Despite the slight recovery oil prices were still on track for a fourth week of declines after OPEC decided to not reduce its production rate, according to Reuters.

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"Following the long and steep decline in oil prices, we have seen some buying interest in recent days," Newedge commodity sales manager Ken Hasegawa told Reuters. "But there is still a lot of selling pressure."

TheStreet Ratings team rates CANADIAN NATURAL RESOURCES as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CANADIAN NATURAL RESOURCES (CNQ) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • CNQ's revenue growth has slightly outpaced the industry average of 6.3%. Since the same quarter one year prior, revenues slightly increased by 1.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for CANADIAN NATURAL RESOURCES is rather high; currently it is at 59.85%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.05% significantly outperformed against the industry average.
  • Net operating cash flow has slightly increased to $2,331.00 million or 9.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.58%.
  • The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.34 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • You can view the full analysis from the report here: CNQ Ratings Report

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