Business · Markets · 1 hr ago
RBC analyst sees strong finances for Canadian oil majors, cuts Cardinal rating
RBC analyst Greg Pardy expects four major Canadian oil companies to generate $13.5-billion in third-quarter free funds flow before dividends.
The companies are Canadian Natural Resources, Suncor Energy, Cenovus Energy and Imperial Oil.
He links the strong cash generation to elevated oil prices and unusual downstream conditions, which he says were driven by the Iran and Russia-Ukraine conflicts.
Pardy estimates the companies paid $6.7-billion in royalties and $4.5-billion in taxes, while buying back $6.5-billion of shares.
Their combined net debt fell by an estimated $5.2-billion, and he expects some producers could have more cash than debt by the end of 2026.
Pardy downgraded Cardinal Energy to sector perform from outperform, while raising targets for many other companies he covers.
He said oil-weighted producers are well positioned, but noted that current high oil prices reflect supply limits rather than stronger demand.
RBC analyst Greg Pardy said Canada’s major oil producers have exceptionally strong balance sheets amid elevated oil prices and strong downstream conditions.
He estimated the four largest producers would generate $13.5-billion in collective third-quarter free funds flow before dividends.
Pardy raised targets for many companies in his coverage and downgraded Cardinal Energy to sector perform from outperform.
He set Cardinal’s target price at $14.50, up from $14 but below the Street average of $14.80.
- Who
- RBC energy analyst Greg Pardy and Canadian oil producers, including Cardinal Energy.
- What
- Pardy cited strong finances for Canada’s major oil producers and downgraded Cardinal Energy to sector perform from outperform.
- When
- Tuesday, October 13, 2026.
- Where
- Canada.
- Why
- Pardy cited elevated oil prices and strong downstream conditions as supporting producers’ finances. The specific reason for Cardinal’s rating cut was not stated.
This story does not have two clearly opposing sides.
Public production data for Cardinal’s Reford 1 project pointed to volumes of 6,184 barrels per day, including seven days of unplanned downtime at the central processing facility in early August.
Cardinal announced the expansion of its Reford 2 project to 6,000 barrels per day.
Pardy released an earnings preview report, raised targets for many stocks in his coverage and downgraded Cardinal Energy.
- Collective third-quarter free funds flow
- Estimated $13.5-billion for Canadian Natural Resources, Suncor Energy, Cenovus Energy and Imperial Oil, before dividends
- Royalties and taxes
- Estimated $6.7-billion in Crown royalties and $4.5-billion in current taxes
- Share buybacks
- $6.5-billion across the four major producers in the third quarter
- Estimated net debt decline
- $5.2-billion for the four major producers
- Cardinal rating
- Cut to sector perform from outperform
- Cardinal price target
- $14.50, raised from $14; Street average was $14.80
What people are saying
printing money
I do not “recall ever having seen this degree of collective balance sheet strength.
the best positioned we have seen in decades
We remain mindful that elevated oil pricing conditions have been caused by geopolitically driven output limitations (as opposed to demand pull)
Sources
Related news
Simplii Financial adds new account and app tools for self-directed customers
Montreal aging-products company expands U.S. operations amid trade disruption
Fraudsters reportedly placed a six-figure trade in a TD cash account
Simplii Financial introduces self-service banking tools as it seeks growth
Green Shift Agrees to Sell Argentina’s Los Altares Project to Myriad Uranium
Industry groups urge Ottawa to raise the RRSP conversion age
Hamilton and Westcourt launch a fund combining nine ETFs
Canada loses 68,000 jobs in September as unemployment rate rises to 6.5%
Gurobi’s Decision Intelligence Summit is set for Prague
CSG becomes largest shareholder in Canada's MDA Space
Stelco says it will proceed with Ontario layoffs despite Ottawa's warning
