11.23
CNQ’s market performance has lost some momentum of late on the heels of hiccups at Horizon oil sands, but such episodes afford excellent buying opportunities. CNQ generally beats street estimates and when it falls shy, the stock typically enters the doldrums for a spell. These episodes have afforded excellent buying opportunities in the past and RBC CM believes such is the case today. CNQ appears poised to deliver the highest free CFPS amongst our large cap North American coverage group in 2010 with free CFPS of $5.33 per share in 2009 at a US$80/bbl WTI price and $5.79 per share in 2011 at a US$90/bbl WTI price. At current levels, CNQ is trading at a 2010E debt-adjusted cash flow multiple of 6.2x (vs. 6.0x for our North American E&P peer group), and a P/NAV ratio of 0.95x, which is slightly above the average for RBC CM’s Canadian independent peer group of 0.9x.
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