Suncor Energy Swings to Profit in Q4

Oil producer Suncor Energy (TSE: SU) reported a profit in the fourth quarter of 2021 compared to a loss a year ago as crude prices soared.

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Adjusted funds from operations increased from C$1.221 billion (C$0.80 per share) to C$3.144 billion (C$2.17 per share) in the quarter ended December 31, 2021.

Adjusted operating earnings came in at C$1.294 billion (C$0.89 per share), compared with an adjusted operating loss of C$109 million (-C$0.07) per share a year ago.

Meanwhile, net earnings amounted to C$1.553 billion (C$1.07 per share) in Q4 2021, up from a net loss of C$168 million (-C$0.11 per share) in Q4 2020.

Total upstream production reached 743,300 barrels of oil equivalent per day (boe/d) in the fourth quarter, down from 769,200 boe/d a year earlier.

CEO Commentary

Suncor’s President and CEO Mark Little said, “Suncor generated C$3.1 billion, or C$2.17 per common share, in adjusted funds from operations during the fourth quarter of 2021, despite operational challenges late in the quarter. These results represent the highest quarterly adjusted funds from operations in the company’s history and an 11% increase on a per common share basis compared to the last per share quarterly record.

“Our increased cash flows in 2021 enabled us to exceed our shareholder return targets for the year through increased dividends and accelerated share repurchases, while at the same time strengthening our balance sheet through accelerated debt reduction.”

Suncor returned C$3.9 billion to shareholders in 2021 through C$2.3 billion in share buybacks and C$1.6 billion in dividends paid, including a dividend increase in the fourth quarter of 2021, returning it to 2019 levels.

Wall Street’s Take

Following the results, BMO Capital analyst Randy Ollenberger kept a Buy rating on SU with a C$57.08 price target.

This implies 48.4% upside potential.

Overall, the consensus among Wall Street analysts is that SU is a Strong Buy based on 12 Buys and one Hold.

The average Suncor Energy price target of C$43.70 implies 13.6% upside potential from current levels.

TipRanks’ Smart Score Rating

SU scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock returns have strong chances to beat the overall market.

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