NEW YORK (AP) — Canadian Natural Resources is poised for growth, according to a research report from Stifel Nicolaus on Thursday, thanks to operations improvements.

THE SPARK: Analyst Amir Arif upgraded the oil and gas producer's stock to "Buy" from "Hold," saying that investors should pick up shares while they're still cheap before the market starts taking into account the operational improvements it has made so far this year.

THE BIG PICTURE: Canadian Natural, based in Calgary, Alberta, operates mainly in North America and is focused on oil sands and heavy oil production. It's in the process of ramping up its first oil sands mining project called Horizon.

But over the past year, the company's U.S. shares have failed to gain much traction, falling about 10 percent.

THE ANALYSIS: Arif said Canadian Natural Resources' shares have lagged those of the overall industry in recent months. But the company's improvements in heavy oil and synthetic differentials, along with strong Horizon production volumes, have yet to be reflected in its share price and should result in strong first-quarter results.

Arif added that additional improvements in heavy oil differentials are expected in the second half of this year, which should further boost the company's 2013 results.

THE SHARES: Up $1.55, or 5 percent, to $32.57 in afternoon trading, after peaking at $32.66 earlier in the session. Over the past 52 weeks, the stock has traded between $25.01 and $36.04.