Sunoco (SUN) AI Stock Analysis

• Market Cap: $7.67B
• Dividend Yield: 7.12%
• Average Volume (3M): 367.46K
• Price to Earnings (P/E): 24.6
• Beta (1Y): 0.67
• Revenue Growth: -8.65%
• EPS Growth: -73.25%
• Country: US
• Employees: 3,298
• Sector: Energy
• Sector Strength: 55
• Industry: Oil & Gas Refining & Marketing
• EPS (TTM): 0.43
• Shares Outstanding: 136,604,570
• 10 Day Avg. Volume: 313,339
• 30 Day Avg. Volume: 367,460
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.03
• Enterprise Value/Revenue: 0.72
• Enterprise Value/Gross Profit: 9.09
• Enterprise Value/Ebitda: 21.88
• 1Y Price Target: $64.00
• Price Target Upside: 27.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 66 Neutral
• Price Target: $56.00 ▲(11.75% Upside)

Sunoco's overall stock score is primarily driven by its strong earnings call performance and optimistic growth outlook, despite mixed financial performance and technical indicators. The high dividend yield adds value, but the high P/E ratio suggests potential overvaluation.

Positive Factors

Strategic Acquisitions

The acquisition of Parkland is anticipated to enhance Sunoco's market position and drive significant earnings growth, supporting long-term strategic objectives.

Improved Gross Profit Margins

Improved gross profit margins indicate better cost management and operational efficiency, contributing to the company's financial resilience over time.

Strong Free Cash Flow Growth

Robust free cash flow growth enhances Sunoco's ability to invest in growth opportunities and return capital to shareholders, reinforcing financial stability.

Negative Factors

Declining Revenue Growth

A decline in revenue growth can signal challenges in market expansion and competitive positioning, potentially impacting long-term profitability.

High Debt Levels

High leverage increases financial risk, especially in volatile markets, potentially limiting Sunoco's ability to invest in growth and manage downturns.

Decreased Fuel Distribution Margins

Decreasing fuel distribution margins can pressure profitability, indicating potential challenges in maintaining competitive pricing and operational efficiency.

Sunoco Business Overview & Revenue Model

Company Description

Sunoco LP (NYSE: SUN) is a leading fuel distributor and convenience store operator in the United States. The company primarily engages in the retail and wholesale distribution of petroleum products, operating a vast network of Sunoco-branded gas stations and convenience stores. Sunoco also provides fuel supply and logistics services, catering to various customer segments, including commercial fleets, industrial users, and retail consumers. Its core offerings include gasoline, diesel, and other petroleum products, alongside convenience store merchandise.

How the Company Makes Money

Sunoco generates revenue through multiple streams, primarily from the sale of fuel at its retail locations and the wholesale distribution of petroleum products. The company operates a large network of convenience stores, which not only sell fuel but also offer a variety of food and beverage items, generating significant in-store sales. Additionally, Sunoco engages in fuel supply agreements with various commercial clients and partners, ensuring a steady stream of revenue from wholesale fuel sales. The company also benefits from strategic partnerships and brand recognition, which help to maintain customer loyalty and drive sales across its extensive network. Factors contributing to its earnings include fluctuations in fuel prices, operational efficiency, and the effectiveness of its marketing strategies.

Sunoco Financial Statement Overview

Summary

Sunoco's financial performance is mixed. The income statement shows declining revenue growth and pressure on profitability, but improved gross profit margin. The balance sheet indicates high leverage, posing risks, while the cash flow statement reveals strong free cash flow growth, providing financial flexibility.

Income Statement

Sunoco's income statement reveals a mixed performance. The company has experienced a decline in revenue growth over the TTM period, with a negative growth rate of -3.50%. However, the gross profit margin has improved to 9.38% in the TTM, indicating better cost management. The net profit margin has decreased to 1.67%, reflecting pressure on profitability. Despite these challenges, the EBIT and EBITDA margins show some resilience, with the EBIT margin at 0.72% and the EBITDA margin at 3.30%.

Balance Sheet

Sunoco's balance sheet shows a high debt-to-equity ratio of 2.04 in the TTM, indicating significant leverage, which poses a risk in volatile markets. The return on equity has decreased to 8.75%, suggesting reduced efficiency in generating profits from equity. The equity ratio stands at 28.39%, reflecting a moderate level of equity financing relative to total assets.

Cash Flow

The cash flow statement highlights a substantial improvement in free cash flow growth, with a remarkable increase of over 2000% in the TTM. The operating cash flow to net income ratio is 0.25, indicating a moderate conversion of income to cash. The free cash flow to net income ratio is low at 0.03, suggesting limited free cash flow relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.59B	22.69B	23.07B	25.73B	17.60B	10.71B
Gross Profit	1.71B	1.73B	1.18B	1.19B	1.17B	867.00M
EBITDA	712.00M	1.03B	825.00M	877.00M	894.00M	602.00M
Net Income	279.00M	716.00M	311.00M	397.00M	446.00M	135.00M
Balance Sheet
Total Assets	14.43B	14.38B	6.83B	6.83B	5.82B	5.27B
Cash, Cash Equivalents and Short-Term Investments	116.00M	94.00M	29.00M	82.00M	25.00M	97.00M
Total Debt	8.34B	8.00B	4.11B	4.12B	3.79B	3.67B
Total Liabilities	10.33B	10.31B	5.85B	5.89B	5.00B	4.63B
Stockholders Equity	4.10B	4.07B	978.00M	942.00M	811.00M	632.00M
Cash Flow
Free Cash Flow	234.00M	205.00M	385.00M	375.00M	369.00M	378.00M
Operating Cash Flow	728.00M	549.00M	600.00M	561.00M	543.00M	502.00M
Investing Cash Flow	-596.00M	477.00M	-288.00M	-464.00M	-387.00M	-120.00M
Financing Cash Flow	-242.00M	-961.00M	-365.00M	-40.00M	-228.00M	-306.00M

Sunoco Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 50.11
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 50.11 is below the 20-day moving average (MA) of 51.59, below the 50-day MA of 52.04, and below the 200-day MA of 53.16, indicating a bearish trend. The MACD of -0.47 indicates Positive momentum. The RSI at 35.66 is Neutral, neither overbought nor oversold. The STOCH value of 4.65 is Positive, 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
UGP	74 Outperform	$4.22B	8.20	18.65%	3.48%	-6.18%	-9.87%
SUN	66 Neutral	$7.67B	24.62	6.62%	7.12%	-8.65%	-73.25%
Sector *	65 Neutral	$15.18B	7.59	4.09%	5.21%	3.87%	-62.32%
DINO	65 Neutral	$9.56B	35.13	-0.93%	3.91%	-14.58%	-107.50%
CVI	56 Neutral	$3.13B	268.82	-50.65%	8.86%	-15.98%	-160.88%
DK	51 Neutral	$1.68B	―	-200.75%	3.66%	-29.94%	-723.41%
PBF	51 Neutral	$3.18B	―	-17.30%	4.01%	-18.73%	-236.79%

Sunoco Corporate Events

Sunoco Enters $1.5 Billion Preferred Units Sale Agreement

On September 4, 2025, Sunoco LP entered into a purchase agreement with RBC Capital Markets, LLC and Barclays Capital Inc. for the sale of 1,500,000 Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Units, expected to generate $1.5 billion in gross proceeds. The offering is set to settle on September 18, 2025, and the units, which are not convertible or exchangeable, will not grant voting rights to holders except under specific conditions.

Sunoco Announces $1.9 Billion Senior Notes Offering

On September 4, 2025, Sunoco LP announced the pricing of its private offering of senior notes, totaling $1.9 billion, with the proceeds intended to fund the acquisition of Parkland Corporation and related costs. The offering is not contingent on the completion of the Parkland Acquisition, and if the acquisition is not completed by May 5, 2026, the notes will be subject to a special mandatory redemption.

Sunoco Announces Private Offering for Parkland Acquisition

On September 4, 2025, Sunoco LP announced the commencement of a private offering of senior notes and Series A Preferred Units to fund its acquisition of Parkland Corporation. The offerings, which are not contingent on each other or the Parkland Acquisition, aim to provide cash consideration for the acquisition and related costs. As of August 25, 2025, Sunoco had $72 million in cash and $250 million in outstanding borrowings, with plans to repay Parkland’s existing credit facilities and assume its debt. If the acquisition is not completed by May 5, 2026, the notes and preferred units will be subject to mandatory redemption. The financial implications of this transaction include maintaining approximately $3.8 billion of Parkland’s debt post-acquisition.

Sunoco Amends Credit Agreement for Parkland Acquisition

On August 8, 2025, Sunoco LP amended its credit agreement to allow for up to $2 billion in cash to be reserved for the Parkland Acquisition, impacting the calculation of the Net Leverage Ratio for financial covenants. This strategic financial move is expected to enhance Sunoco’s operational flexibility and strengthen its market position, potentially benefiting stakeholders by supporting the company’s growth objectives.

Sunoco Announces Q2 2025 Financial Results and Merger Approval

On August 6, 2025, Sunoco LP announced its second quarter 2025 financial results, reporting a net income of $86 million and an Adjusted EBITDA of $464 million. The company increased its quarterly distribution by 1.25% and reaffirmed its full-year 2025 Adjusted EBITDA guidance. Despite a decrease in net income compared to the previous year, Sunoco’s segments showed varied performance, with the Fuel Distribution segment experiencing a drop in Adjusted EBITDA, while the Pipeline Systems and Terminals segments saw significant increases. The announcement also highlighted the approval of the merger with Parkland, expected to close in the fourth quarter of 2025, and emphasized Sunoco’s ongoing commitment to returning capital to unitholders through distribution growth.

Sunoco Increases Quarterly Cash Distribution by 1.25%

On July 24, 2025, Sunoco LP announced a 1.25% increase in its quarterly cash distribution to $0.9088 per common unit for the quarter ending June 30, 2025. This marks the third consecutive quarterly increase, aligning with the company’s strategy to achieve a distribution growth rate of at least 5% in 2025. The distribution will be paid on August 19, 2025, to unitholders of record as of August 8, 2025, reflecting Sunoco’s commitment to returning capital to its investors.