Sunoco (SUN) AI Stock Analysis

• Market Cap: $8.45B
• Dividend Yield: 6.35%
• Average Volume (3M): 433.90K
• Price to Earnings (P/E): 9.9
• Beta (1Y): 0.77
• Revenue Growth: -3.59%
• EPS Growth: 29.37%
• Country: US
• Employees: 3,298
• Sector: Energy
• Sector Strength: 52
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 1.32
• Shares Outstanding: 136,332,200
• 10 Day Avg. Volume: 593,129
• 30 Day Avg. Volume: 433,897
• PEG Ratio: 0.21
• Price to Book (P/B): 1.85
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 36.76
• Enterprise Value/Market Cap: 1.83
• Enterprise Value/Revenue: 0.17
• Enterprise Value/Gross Profit: 9.02
• Enterprise Value/Ebitda: 2.72
• 1Y Price Target: $64.43
• Price Target Upside: 16.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

Sunoco displays strong financial health with robust profitability and well-managed debt, contributing to a high overall score. The stock is considered undervalued, with a solid dividend yield providing additional investor appeal. Although technical indicators show short-term bearish momentum, the positive guidance and strategic plans from the earnings call reinforce long-term growth prospects.

Positive Factors

Cash Flow and Capital Expenditure

Free cash flow per unit of $1.80 was well above the estimate of $1.14, primarily due to the EBITDA beat and lower capital expenditures.

Financial Performance

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

Mergers and Acquisitions

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

Negative Factors

Capital Expenditure

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

Market Exposure

SUN's underperformance is attributed to its lack of exposure to the AI/data center narrative, which has buoyed valuations across much of analyst coverage.

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 demonstrates strong profitability with a solid gross profit margin and a healthy net profit margin. The balance sheet reflects a strong equity position and conservative debt usage. Cash flow management is robust, despite a decline in free cash flow growth, maintaining positive free cash flow.

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
8.00B	4.11B	4.12B	3.79B	3.67B
	Net Debt
7.91B	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: Neutral
• Last Price: 55.53
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SUN, the sentiment is Neutral. The current price of 55.53 is below the 20-day moving average (MA) of 56.21, below the 50-day MA of 56.03, and above the 200-day MA of 52.80, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 48.99 is Neutral, neither overbought nor oversold. The STOCH value of 39.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SUN.

Sunoco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SUN	74 Outperform	$8.45B	9.95	27.67%	6.35%	-3.59%	29.37%
DINO	72 Outperform	$6.43B	35.13	-1.49%	5.86%	-11.17%	-109.60%
UGP	68 Neutral	$3.13B	7.81	14.87%	3.71%	-4.58%	-23.88%
Sector *	56 Neutral	$7.16B	3.85	-4.87%	5.83%	0.21%	-51.96%
PBF	51 Neutral	$2.33B	―	-18.01%	5.22%	-16.30%	-160.78%
DK	51 Neutral	$934.59M	―	-151.69%	6.59%	-29.23%	-931.43%
CVI	46 Neutral	$2.15B	268.82	-27.14%	9.37%	-16.21%	-130.18%

Sunoco Corporate Events

Sunoco Announces Q1 2025 Results and Acquisitions

On May 6, 2025, Sunoco LP announced its first quarter 2025 financial results, reporting a net income of $207 million and an adjusted EBITDA of $458 million. The company declared a 1.25% increase in its quarterly distribution, aligning with its strategy to achieve a 5% annual distribution growth. Sunoco also revealed plans to acquire Parkland Corporation for $9.1 billion and TanQuid, a terminal operator in Germany and Poland, for approximately €500 million. These acquisitions are expected to enhance Sunoco’s market position and diversify its cash flows, with both transactions anticipated to close in the second half of 2025.

Spark’s Take on SUN Stock

According to Spark, TipRanks’ AI Analyst, SUN is a Outperform.

Sunoco’s overall score reflects its strong financial base, favorable valuation, and positive earnings outlook. Despite challenges in specific segments, the company’s strategic actions and growth prospects contribute to a solid investment opportunity.

To see Spark’s full report on SUN stock, click here.

Sunoco Board Member Christopher Curia Announces Retirement

On April 22, 2025, Christopher R. Curia announced his retirement from the board of directors of Sunoco GP LLC, effective May 1, 2025. His departure is not due to any disagreements with the company, and he has been a director since August 2014.

Spark’s Take on SUN Stock

According to Spark, TipRanks’ AI Analyst, SUN is a Outperform.

Sunoco’s overall score reflects its strong financial base, favorable valuation, and positive earnings outlook. Despite challenges in specific segments, the company’s strategic actions and growth prospects contribute to a solid investment opportunity.

To see Spark’s full report on SUN stock, click here.

Sunoco Announces Increased Cash Distribution for Q1 2025

On April 23, 2025, Sunoco LP announced that its Board of Directors approved a cash distribution of $0.8976 per common unit for the quarter ended March 31, 2025, marking a 1.25% increase from the previous quarter. This increase aligns with Sunoco’s capital allocation strategy and its 2025 business outlook, which targets an annual distribution growth rate of at least 5%. The distribution will be paid on May 20, 2025, to unitholders of record as of May 9, 2025, reflecting the company’s ongoing commitment to returning capital to its unitholders.

Spark’s Take on SUN Stock

According to Spark, TipRanks’ AI Analyst, SUN is a Outperform.

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.

To see Spark’s full report on SUN stock, click here.

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.