Sunoco Looks Attractive: Analyst Cites Pullback, Upcoming Guidance As Catalysts
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 07 2024
0mins
Should l Buy SUN?
Source: Business Insider
- Upgrade of Sunoco LP: Stifel analyst upgraded Sunoco LP to Buy from Hold with a price target of $62.00.
- Attractive Re-entry Point: Sunoco's unit price dropped by 13% since mid-February, making it an attractive re-entry point according to the analyst.
- Anticipated Guidance Impact: Management's upcoming guidance around second-quarter FY24 earnings could boost the unit price.
- 2024 Outlook Update: The guidance is expected to provide an update on the 2024 outlook for Sunoco's legacy business, NuStar assets, and potential synergies.
- Financial Estimates and Investment Opportunities: Akyol estimates EBITDA for FY24 and FY25, and investors can access the stock through InfraCap MLP ETF and Global X MLP ETF.
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Analyst Views on SUN
Wall Street analysts forecast SUN stock price to fall
6 Analyst Rating
6 Buy
0 Hold
0 Sell
Strong Buy
Current: 66.910
Low
57.00
Averages
63.67
High
70.00
Current: 66.910
Low
57.00
Averages
63.67
High
70.00
About SUN
Sunoco LP is an energy infrastructure and fuel distribution master limited partnership operating across 32 countries and territories in North America, the Greater Caribbean, and Europe. Its midstream operations include a network of approximately 14,000 miles of pipeline and over 160 terminals. Its Fuel Distribution segment supplies motor fuel to independently operated dealer stations, distributors, commission agents and other consumers. Its Pipeline Systems segment includes an integrated pipeline and terminal network comprised of refined products, crude oil and ammonia pipelines and terminals. Through its Terminals segment, it operates four transmix processing facilities and 83 terminals. Its terminals provide storage and distribution services to support our fuel distribution business and other third-party customers. Its Refinery segment is composed of the Burnaby Refinery, which is responsible for the refining of fuel products and engaged in renewable business activities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Distribution Growth Target: The company declared a distribution of $0.9899 per unit, with a trailing 12-month coverage ratio of 1.9x, aiming for at least a 5% multi-year distribution growth rate, reflecting confidence in future cash flows and a stable financial strategy.
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See More
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- Capital Expenditure Plans: The company expects to invest between $5.5 billion and $5.9 billion in growth capital for 2026, with $1.53 billion spent in Q1, showcasing confidence in future expansion, particularly in natural gas and LNG sectors.
- Operational Data Highlights: In Q1, NGL and refined product transportation volumes increased by 19%, setting a new record, indicating the company's successful enhancement of transport capacity amid rising market demand, further solidifying its leadership position in the energy market.
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See More
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- Performance Expectations: Over the past year, Sunoco LP has exceeded EPS estimates 50% of the time and revenue estimates 75% of the time, reflecting the company's relative stability in managing market expectations.
- Revision Dynamics: In the last three months, EPS estimates saw one upward revision with no downward adjustments, while revenue estimates experienced one downward revision, suggesting fluctuating market confidence in the company's future revenue.
- Financing Strategy: Sunoco LP plans to issue $1.2 billion in senior notes maturing in 2031 and 2034, aimed at strengthening the company's capital structure and supporting future growth strategies.
See More
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