Zacks Investment Research upgraded shares of Canadian Natural Resources Ltd. (CNQ) from UNDERPERFORM to NEUTRAL on June 28, 2013, with a target price of $30.00.
We are recalibrating our investment thesis on Canadian Natural Resources to Neutral from Underperform, reflecting a balanced risk/reward profile. The company's large, diversified oil and gas asset bases, together with international exposure and a well-balanced blend of conventional and unconventional prospects, provides a buffer against uncertainties in the sector. Other positives for CNQ include its active hedging policy, competitive cost structure, strong balance sheet and robust free cash flow. However, the company s exposure to the inherently cyclical and volatile E&P sector offsets these strengths and remains a key area of concern, in our view. The stock has also been held back by operational challenges, continued volatility in natural gas prices and a fresh round of cost inflation in the oil sands regions.
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