Americas Energy Oil Strong Canadian Oil Fundamental Backdrop Continues in Both Upstream and Refining

Equity Research 19 August 2026 | 9:24PM EDT

Strong Canadian Oil Fundamental Backdrop Continues in Both Upstream and Refining; Buy CVE and CNQ

In this note, we refresh Canadian Oil estimates and provide our latest views on the Neil Mehta | group. Despite strong year-to-date performance, we continue to highlight CVE with Goldman Sachs & Co. LLC

~25% total return potential to our US$40 price target and shares trading at a Lydia Gould | ~9%/10% free cash flow yield in 2027/2028 at $75/b Brent. We see improving Goldman Sachs & Co. LLC risk/reward to CNQ, which stands to benefit from favorable SCO pricing and offers a Josiah Knight | higher relative dividend yield near 4%, though we monitor upcoming turnaround at Goldman Sachs & Co. LLC Horizon. At both companies, we highlight positive momentum on shareholder returns, as current commodity prices support progress toward respective net debt targets. While Neutral-rated on SU after multi-year outperformance, we believe recent volatility around management transition has improved the risk/reward. Lastly, we raise our price target for IMO.TO, but continue to push back on expensive, relative valuation. Looking ahead, we focus on (a) U.S. and Canadian refining margins, (b) Western Canada production growth, (c) WTI-WCS differentials, (d) upcoming turnarounds, (e) accelerating shareholder returns, and (f) future egress opportunities, alongside updates on the recent trilateral MOU.

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Goldman Sachs Americas Energy: Oil

On average, our Buy-rated stocks offer 20% upside to target at long-term oil prices of $75/b Brent and $70/b WTI Canadian Oil Comp Sheet Price Target Dividend Yield Return Tot Ret EV / DACF ND / EBITDA FCF / Equity Value Rating 8/19/26 12 Mo. % % 2026E 2027E 2028E 2026E 2027E 2028E 2026E 2027E 2028E Canadian Oils SU Neutral $67.47 $75.00 2.4% 11% 14% 6.0x 7.4x 7.2x 0.1x 0.0x 0.0x 12% 9% 9% CNQ Buy $49.50 $58.00 3.6% 17% 21% 7.0x 8.5x 8.4x 0.5x 0.6x 0.5x 10% 8% 8% IMO.TO Sell C$188.03 C$150.00 1.8% -20% -18% 10.4x 11.7x 12.1x 0.2x 0.2x 0.2x 7% 7% 6% CVE Buy $32.48 $40.00 1.9% 23% 25% 5.6x 7.3x 6.9x 0.2x 0.2x 0.1x 13% 9% 10% Average/Sum -- -- -- 2.4% 8% 10% 7.2x 8.8x 8.6x 0.2x 0.2x 0.2x 10% 8% 9%

Source: Goldman Sachs Global Investment Research, Factset