Americas Energy Oil Modestly Raising SU and CNQ Targets

Equity Research 29 July 2026 | 12:24AM EDT

Modestly Raising SU and CNQ Targets; Focus on Pipeline Outlook, Return of Capital & Growth

In this note, we update estimates for Canadian Natural Resources (CNQ) and Suncor Neil Mehta | Energy (SU) ahead of 2Q26 earnings to reflect mark-to-market commodity prices Goldman Sachs & Co. LLC

and refining margins. Across our broader Canadian Oil coverage, CNQ continues to Lydia Gould | offer a compelling 28% total return potential, as shares stand to benefit from strong Goldman Sachs & Co. LLC realized pricing. We expect a higher commodity price environment to accelerate Josiah Knight | progress toward C$13 bn of net debt and position the company to return 100% of Goldman Sachs & Co. LLC free cash flow to shareholders. While we remain Neutral-rated on SU following multi-year outperformance and anticipate near-term headwinds from recent wet weather, integrated operations provide advantaged exposure to tight refining fundamentals. In addition, we note a long-term transition to majority in-situ production should support future margin expansion. Please see within for further details.

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Goldman Sachs Americas Energy: Oil

Exhibit 1: Canadian Oils Comp Sheet Price Target Dividend Yield Return Tot Ret EV / DACF ND / EBITDA FCF / Equity Value Rating 7/28/26 12 Mo. % % 2026E 2027E 2028E 2026E 2027E 2028E 2026E 2027E 2028E Canadian Oils SU Neutral $63.90 $75.00 2.5% 17% 20% 6.2x 7.3x 7.0x 0.1x 0.1x 0.0x 11% 9% 10% CNQ Buy $44.19 $55.00 4.0% 24% 28% 7.1x 8.2x 8.0x 0.6x 0.6x 0.6x 9% 8% 9% IMO.TO Sell C$177.58 C$133.00 2.0% -25% -23% 10.4x 11.1x 11.6x 0.2x 0.2x 0.2x 7% 7% 7% CVE Buy $27.66 $39.00 2.2% 41% 43% 5.4x 6.7x 6.3x 0.3x 0.3x 0.2x 12% 10% 11% Average/Sum -- -- -- 2.6% 14% 17% 7.3x 8.3x 8.2x 0.3x 0.3x 0.3x 10% 8% 9%

Source: FactSet, Goldman Sachs Global Investment Research

Canadian Natural Resources n We see a constructive setup heading into 2Q26, as operational momentum continues following the first quarter, driving April production at Oil Sands Mining and Upgrading assets to roughly ~630 kbd on a ~106% upgrader utilization rate. This strong output carries high-margin value, as SCO prices maintain a healthy premium to WTI. While planned turnaround at Jackfish introduces a modest ~9 kbd headwind, we expect underlying production to sustain the early-year growth trajectory with no major deviations. This backdrop offers a compelling entry point, particularly after recent relative underperformance, with support from higher commodity prices, strong SCO pricing spreads, and a favorable dividend yield. We focus on operational execution and cost management across assets, estimating ~1,664 MBOE/d of total production in 2Q26. Looking ahead, we expect a planned 35-day turnaround at Horizon in September, impacting annual average production by ~29 kbd per previous company guidance. n We look for commentary on free cash flow generation, shareholder returns, and debt paydown amid elevated commodity prices. With net debt falling below ~C$16 bn this spring, the company now directs ~75% of free cash flow to shareholder returns, while allocating the remainder to the balance sheet. We note management sees a path to achieving the next ~C$13 bn net debt target by year-end at strip pricing, pushing shareholder returns to 100% of free cash flow. Separately, management maintains full-year capital spend guidance of ~C$6.9 bn, which includes roughly ~C$6 bn in operating capital. We continue to track operational updates on short and medium-term projects, including Jackfish and Pike 2, and await further color on capital spend for long-term expansion projects at Albian and Horizon. n We now estimate 2Q26…