Canadian Natural Resource Ltd. (NYSE: CNQ) is a Canada-based exploration and production company that explores for, develops, produces, markets and sells crude oil, natural gas liquids and natural gas.
Analysts like CNQ projected double-digit revenue for FY 2009, following a solid performance in FY 2008. Further, analysts still see impressive margins from CNQ's Canadian oil sands operations, despite the province of Alberta's oil/gas royalties increases. CNQ is also one of the largest undeveloped land holders in the Western Canadian Sedimentary Basin, with nearly 12.8 million acres. The company also has proved reserves of 1.3 billion barrels of oil and 3.8 trillion cubic feet of natural gas.
Further, analysts also see improving results from CNQ's North Sea and offshore West Africa operations. The Reuters FY 2008/FY 2009 EPS consensus estimates for CNQ are $4.24 to $5.97.
The risks? Analysts are keeping an eye on CNQ's operating expenses, including skilled labor costs. A substantial, sustained decline in the price of oil would also hurt CNQ's results.
Stock Analysis: Canadian Natural Resources is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from CNQ's shares. Sell/Stop Loss if you were to purchase shares in this company: $64.
Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.
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