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Assessing Sunoco (SUN) Valuation After Cluster Of Analyst Upgrades

Simply Wall St · 4d ago

Raymond James recently upgraded Sunoco (SUN) to Strong Buy, and several other brokerages have echoed positive views. This has put fresh attention on what this cluster of analyst moves might mean for the stock.

See our latest analysis for Sunoco.

At a share price of $53.8, Sunoco has seen a 2.22% 1 day share price return and a 9.95% 90 day share price return. Its 1 year total shareholder return of 9.59% and 5 year total shareholder return of 159.95% suggest momentum that longer term investors may be watching closely, alongside recent analyst upgrades and income focused commentary.

If Sunoco has your attention, it can be useful to widen the lens and see what else is out there in energy and income ideas by checking fast growing stocks with high insider ownership.

With SUN trading at $53.80 against an average analyst target of about $64.22 and one firm seeing room to $70, the key question is whether this gap signals a genuine opportunity or whether the market already reflects future growth.

Most Popular Narrative Narrative: 16.9% Undervalued

Compared with Sunoco's last close at $53.80, the most followed narrative sees fair value closer to the mid 60s, built on specific growth and margin assumptions.

The NuStar and upcoming Parkland and TanQuid acquisitions are expected to deliver substantial double-digit accretion and cost synergies, further increasing operating leverage and net margins while materially enhancing Sunoco's international and midstream asset footprint.

Read the complete narrative.

Curious what kind of revenue ramp, margin reset, and earnings step change could support that higher value, even with a lower future P/E? The narrative spells it out.

Result: Fair Value of $64.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, there is still the chance that weaker long term fuel demand, or acquisitions that fall short of expectations, could challenge this 16.9% undervalued story.

Find out about the key risks to this Sunoco narrative.

Build Your Own Sunoco Narrative

If the story here does not quite fit your view, or you would rather test the numbers yourself, you can build a custom thesis in minutes with Do it your way.

A great starting point for your Sunoco research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Sunoco is on your radar, do not stop there. Broadening your watchlist across sectors can reveal opportunities you might otherwise miss.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.