Sunoco (SUN) AI Stock Analysis

• Market Cap: $8.08B
• Dividend Yield: 6.97%
• Average Volume (3M): 399.35K
• Price to Earnings (P/E): 8.8
• Beta (1Y): 0.87
• Revenue Growth: -1.63%
• EPS Growth: 80.11%
• Country: US
• Employees: 3,298
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 6.61
• Shares Outstanding: 136,235,890
• 10 Day Avg. Volume: 396,848
• 30 Day Avg. Volume: 399,354
• PEG Ratio: 0.11
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.38
• Price to Cash Flow (P/CF): 17.60
• P/FCF Ratio: 9.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $64.17
• Price Target Upside: 21.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Sunoco's stock score of 76 reflects a solid financial foundation with strong profitability and strategic growth prospects. The positive earnings call and recent corporate actions bolster confidence in future performance. The valuation indicates potential undervaluation, while technical analysis shows stable momentum.

Positive Factors

Earnings and Growth Forecast

SUN's 2025 EBITDA guidance and distribution growth target were above consensus, leading to expectations of a positive stock reaction.

Financial Performance

Q3 results beat consensus and our estimates, on stronger results from both legacy SUN assets and the NS acquisition.

Merger and Acquisition Opportunities

SUN management is optimistic about merger and acquisition opportunities and its interest in expanding in Europe and the Caribbean.

Negative Factors

Capital Expenditures

Capex for 2025 is expected to be much higher than both the consensus and previous forecasts.

Investor Concerns

Investor concerns include SUN's MLP structure and whether ET wields greater influence over SUN than previously appreciated.

Operating Expenses

Management expects operating expenses to be significantly higher than consensus estimates.

Sunoco Business Overview & Revenue Model

Company Description

Sunoco LP, together with its subsidiaries, distributes and retails motor fuels in the United States. It operates in two segments, Fuel Distribution and Marketing, and All Other. The Fuel Distribution and Marketing segment purchases motor fuel from independent refiners and oil companies and supplies it to independently operated dealer stations, distributors and other consumer of motor fuel, and partnership operated stations, as well as to commission agent locations. The All Other segment operates retail stores that offer motor fuel, merchandise, foodservice, and other services that include credit card processing, car washes, lottery, automated teller machines, money orders, prepaid phone cards, and wireless services. It also leases and subleases real estate properties; and operates terminal facilities on the Hawaiian Islands. As of December 31, 2021, the company operated 78 retail stores in Hawaii and New Jersey. Sunoco GP LLC serves as the general partner of the company. The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in October 2014. Sunoco LP was founded in 1886 and is headquartered in Dallas, Texas.

How the Company Makes Money

Sunoco LP generates revenue primarily through the wholesale distribution of motor fuels, including gasoline and diesel, to a wide range of customers such as convenience stores, independent retailers, and commercial clients. The company benefits from its extensive distribution network, which allows efficient fuel supply to various regions. Key revenue streams include fuel sales to both branded Sunoco outlets and unbranded customers, leveraging its logistics capabilities. Sunoco LP also earns from rental income through leasing real estate properties and storage facilities. Strategic partnerships with major oil companies and long-term supply agreements contribute significantly to its earnings, ensuring a stable and diversified revenue base.

Sunoco Financial Statement Overview

Summary

Sunoco's financials are strong with good profitability margins and a solid equity position. Revenue volatility is a concern, but cash flow management remains robust. The company shows resilience and strategic debt management.

Income Statement

Sunoco's income statement reveals a strong gross profit margin of 9.2% and a net profit margin of 3.9%, indicating good profitability. The EBIT margin is 3.5% and the EBITDA margin is 4.5%, which are respectable for the industry. Revenue growth has been volatile, with a decline of 1.6% in the last year, but this follows a significant increase in previous years, suggesting potential for recovery.

Balance Sheet

The balance sheet shows a strong equity position with an equity ratio of 28.3%, which demonstrates a solid foundation. However, the debt-to-equity ratio of 0.13 is low, indicating a conservative use of debt. Return on equity is healthy at 21.5%, reflecting efficient use of shareholder funds. The company's balance sheet stability is generally favorable with some room for leveraging.

Cash Flow

Sunoco demonstrates robust cash flow management with an operating cash flow to net income ratio of 0.63 and a free cash flow to net income ratio of 0.23. Despite a decrease in free cash flow growth by 46.8% over the past year, the company has maintained positive free cash flow, which is crucial for operations and growth.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
22.69B	23.07B	25.73B	17.60B	10.71B
	Gross Profit
2.10B	1.18B	1.19B	1.17B	867.00M
	EBIT
791.00M	635.00M	477.00M	562.00M	237.00M
	EBITDA
1.03B	825.00M	877.00M	894.00M	602.00M
	Net Income Common Stockholders
874.00M	311.00M	397.00M	446.00M	212.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
94.00M	29.00M	82.00M	25.00M	97.00M
	Total Assets
14.38B	6.83B	6.83B	5.82B	5.27B
	Total Debt
515.00M	4.11B	4.12B	3.79B	3.67B
	Net Debt
421.00M	4.08B	4.04B	3.77B	3.57B
	Total Liabilities
10.31B	5.85B	5.89B	5.00B	4.63B
	Stockholders Equity
4.07B	978.00M	942.00M	811.00M	632.00M
Cash Flow		Free Cash Flow
205.00M	385.00M	375.00M	369.00M	378.00M
	Operating Cash Flow
549.00M	600.00M	561.00M	543.00M	502.00M
	Investing Cash Flow
477.00M	-288.00M	-464.00M	-387.00M	-120.00M
	Financing Cash Flow
-961.00M	-365.00M	-40.00M	-228.00M	-306.00M

Sunoco Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 52.92
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SUN, the sentiment is Negative. The current price of 52.92 is below the 20-day moving average (MA) of 56.84, below the 50-day MA of 57.21, and below the 200-day MA of 53.36, indicating a bearish trend. The MACD of 0.36 indicates Negative momentum. The RSI at 56.89 is Neutral, neither overbought nor oversold. The STOCH value of 81.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SUN.

Sunoco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SUN	76 Outperform	$8.08B	8.82	28.38%	6.97%	-1.63%	80.11%
UGP	73 Outperform	$3.16B	7.29	16.54%	3.92%	-1.88%	-12.12%
DINO	66 Neutral	$5.19B	30.24	1.78%	7.26%	-10.58%	-90.08%
Sector *	57 Neutral	$7.68B	4.29	-3.52%	6.80%	-0.14%	-64.60%
CVI	55 Neutral	$1.77B	252.59	0.90%	12.39%	-17.69%	-99.09%
PBF	48 Neutral	$1.68B	―	-8.87%	7.31%	-13.59%	-127.47%
DK	47 Neutral	$767.14M	―	-108.21%	8.79%	-28.68%	-4373.94%

Sunoco Corporate Events

Sunoco Upsizes Private Offering to $1 Billion

On March 20, 2025, Sunoco LP announced the pricing of an upsized private offering of $1 billion in 6.250% senior notes due 2033, increased from an initial $750 million. The proceeds will be used to repay existing debt, including the full redemption of NuStar Logistics’ 5.750% senior notes due 2025 and a portion of Sunoco’s revolving credit facility, potentially strengthening its financial position and market operations.

Sunoco Announces $750M Senior Notes Offering

On March 20, 2025, Sunoco LP announced a private offering of senior notes amounting to $750 million, intended to repay existing debts, including the full redemption of NuStar Logistics’ 5.750% senior notes due 2025. Concurrently, Sunoco entered into an agreement to acquire two Bermuda entities managing fuel terminals in Germany and Poland for under €500 million, expected to close in the second quarter of 2025. This strategic acquisition and the notes offering are independent of each other, with the acquisition aimed at expanding Sunoco’s operational footprint in Europe.

Sunoco Announces Increased Quarterly Cash Distribution

On January 27, 2025, Sunoco LP announced that its Board of Directors approved a quarterly cash distribution of $0.8865 per common unit for the quarter ended December 31, 2024, reflecting a 1.25% increase over the previous quarter. This marks the third consecutive annual increase in distribution, underscoring a strong long-term financial outlook and a path for continued multi-year distribution growth. The distribution will be paid on February 19, 2025, to unitholders of record as of February 7, 2025.