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Just as other stocks with a high natural gas exposure, Canadian Natural Resources (NYSE:CNQ) has struggled. It is down over 15% year to date. There are clear arguments against owning the stock as natural gas prices have dropped tremendously. Still, the company has tremendous assets and should ride out the weak conditions without a hiccup. CNQ should be in prime position for the recovery in natural gas prices because of its size ($34 billion market cap) and the fact that it generates significant cash and has sizable reserves.

The valuations are very attractive; two out of three suggest the stock is significantly undervalued to the tune of 50%. Below is an in-depth look at the valuation metrics and stock chart.

Valuation: Canadian Natural Resources' trailing 5-year valuation metrics suggest that the stock is undervalued as all of the metrics are below their respective 5-year averages. Canadian Natural Resources' current P/B ratio is 1.5 and it has averaged 2.3 over the past 5 years with a high of 4 and low of 1.2. Canadian Natural Resources' current P/S ratio is 2.4 and it has averaged 3.1 over the past 5 years with a high of 4.5 and low of 1.5.

Price Target: The consensus price target for the analysts who follow Canadian Natural Resources is $47. That is upside of 52% from today's stock price of $30.66 and suggests that the stock is undervalued at these levels. This also suggests that the stock has significant upside and is an attractive opportunity at these levels.

Forward Valuation: Canadian Natural Resources is currently trading at about $31 a share with analysts expecting EPS of $3.6 next year, an earnings increase of 37% year/year, for a forward P/E ratio of 8.5. Taking a look at the company's publicly traded comparisons will give us a better idea of the stock's relative valuation. Imperial Oil (NYSEMKT:IMO) is currently trading at about $41 a share with analysts expecting EPS of $4.03 next year, an earnings increase of 7% y/y, for a forward P/E ratio of 10.1. Suncor Energy (NYSE:SU) is currently trading at about $28 a share with analysts expecting EPS of $3.84 next year, an earnings increase of 11% y/y, for a forward P/E ratio of 7.2. Apache (NYSE:APA) is currently trading at about $82 a share with analysts expecting EPS of $13.34 next year, an earnings increase of 10% y/y, for a forward P/E ratio of 6.2. The mean forward P/E of Canadian Natural Resources' competitors is 7.8 which suggests that Canadian Natural Resources is fairly valued relative to its publicly traded competitors.

Earnings Estimates: Canadian Natural Resources has beat EPS estimates 3 times in the past 4 quarters. The company's EPS figures have come in between -20 cents and 8 cents from consensus estimates or about -42.6% to 14% from analyst estimates. The company has reported earnings that have differed from analyst estimates by a wide margin, which suggests that the stock may experience upside from earnings surprises.

Price Action: Canadian Natural Resources is down 27.98% over the past year, under performing the S&P 500, which is up 2.2%. Looking at the technicals, the stock is currently below its 50 day moving average, which sits at $32.40 and below its 200-day moving average, which sits at $34.76.

(Click to enlarge)

Source: Canadian National Resources: Very Well Positioned For Rebound In Natural Gas Prices