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Sunoco LP (SUN)
NYSE:SUN
US Market

Sunoco (SUN) AI Stock Analysis

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SU

Sunoco

(NYSE:SUN)

Rating:73Outperform
Price Target:
$61.00
▲(10.85%Upside)
Sunoco's overall stock score is driven by its strong valuation and positive earnings call, indicating a solid investment opportunity. Financial performance and technical analysis present some challenges, but strategic acquisitions and distribution growth provide a positive outlook.
Positive Factors
Distribution Growth
The company signaled that distribution growth could be 'at least 5%' for the fiscal year and potentially beyond.
Expansion Opportunities
SUN management is optimistic about merger and acquisition opportunities and its interest in expanding in Europe and the Caribbean.
Valuation and Growth Prospects
SUN remains undervalued given strong prospects for adjusted EBITDA growth in fuel distribution and a higher-quality base business via its NS acquisition that has still not been credited.
Negative Factors
Investor Concerns
Investor concerns include SUN's MLP structure and whether ET wields greater influence over SUN than previously appreciated.
Market Sentiment
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.
Seasonal Underperformance
Seasonal underperformance in 'Fuel Distribution' appears explainable as SUN typically experiences a step-down in the fourth quarter following the summer driving season.

Sunoco (SUN) vs. SPDR S&P 500 ETF (SPY)

Sunoco Business Overview & Revenue Model

Company DescriptionSunoco 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 MoneySunoco makes money primarily through the wholesale distribution of motor fuels, which accounts for the majority of its revenue. The company buys refined fuels from various suppliers, including major oil companies, and sells them to a diverse customer base that includes independent dealers, convenience stores, and commercial operators. Sunoco's earnings are significantly influenced by fuel volume sales and the margin between the purchase and sale price of fuel. In addition to wholesale fuel distribution, the company generates income from the operation of company-operated convenience stores and from fees associated with its franchise and licensing agreements. Strategic partnerships with suppliers and retailers also contribute to its revenue by enhancing its distribution network and ensuring a steady supply of products.

Sunoco Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: 2.48%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
Sunoco LP's earnings call indicated a strong start to 2025 with positive financial performance, strategic acquisitions, and distribution growth. While there were challenges in the Pipeline Systems segment, the overall outlook remains positive with continued growth and expansion plans.
Q1-2025 Updates
Positive Updates
Strong Financial Performance and Stability
Sunoco LP reported a solid first quarter with adjusted EBITDA of $458 million and distributable cash flow of $310 million. The balance sheet is strong with leverage at 4.1x, in line with long-term targets, and the revolving credit facility had no borrowings outstanding.
Distribution Increase and Coverage
Sunoco declared a distribution of $0.8976 per common unit, marking an increase of over 1.25% from the previous quarter, with a trailing 12-month coverage ratio of 1.9x. This is the second consecutive quarterly increase and aligns with the capital allocation strategy.
Strategic Acquisitions and Expansion
The acquisition of Parkland Corporation for approximately $9.1 billion and TanQuid, Germany's largest independent storage operator, for €500 million are expected to expand geographic reach and enhance growth. These acquisitions are anticipated to be accretive to unitholders in the first year.
Fuel Distribution and Terminal Growth
Adjusted EBITDA for Fuel Distribution was $220 million, an increase from $192 million in the previous quarter. Terminal segment adjusted EBITDA also increased to $66 million, up from $59 million in the previous quarter and $24 million in the first quarter of last year.
Negative Updates
Decrease in Pipeline Systems Segment Performance
The Pipeline Systems segment reported adjusted EBITDA of $172 million, down from $188 million in the previous quarter. Throughput was approximately 1.3 million barrels per day, a decrease from 1.4 million barrels per day in the fourth quarter.
Challenges with Reliability at Refineries
The Pipeline Systems segment faced headwinds due to a few reliability challenges at refineries that feed the system, impacting performance.
Company Guidance
During Sunoco LP's First Quarter 2025 Earnings Conference Call, the company provided guidance indicating a strong start to the year, with expectations to meet their full-year financial targets. Sunoco reported an adjusted EBITDA of $458 million and distributable cash flow as adjusted of $310 million for the first quarter. The company invested $75 million in growth capital and $26 million in maintenance capital. A recent $1 billion senior notes offering at 6.25% due in 2033 helped extend their debt maturity profile. The acquisition of TanQuid for approximately €500 million is expected to be accretive in the first year. Sunoco's leverage ratio stood at 4.1x, aligning with their long-term target. The quarterly distribution was increased to $0.8976 per common unit, marking a year-over-year increase of over 9%. The company's strategy focuses on maintaining a strong balance sheet, optimizing fuel profit, and leveraging market conditions to sustain growth and increase shareholder value.

Sunoco Financial Statement Overview

Summary
Sunoco presents a stable financial position with operational efficiency and a solid return on equity. However, high leverage and a declining free cash flow growth rate could present risks.
Income Statement
72
Positive
Sunoco shows a mixed performance with a strong gross profit margin and a declining net profit margin in TTM (Trailing-Twelve-Months). The revenue has slightly decreased compared to the previous year, indicating a challenge in maintaining growth. However, EBIT and EBITDA margins demonstrate operational efficiency in the TTM.
Balance Sheet
65
Positive
The balance sheet reveals a high debt-to-equity ratio, which could be a risk if earnings do not cover interest payments. However, the equity ratio shows a moderate level of leverage. Return on equity is solid, indicating effective use of equity to generate profits.
Cash Flow
68
Positive
The cash flow statement indicates a stable operating cash flow, but free cash flow has decreased significantly in the TTM, suggesting potential challenges in liquidity. The operating cash flow to net income ratio is healthy, but the decrease in free cash flow growth rate may pose future concerns.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue22.37B22.69B23.07B25.73B17.60B10.71B
Gross Profit1.78B2.10B1.18B1.19B1.17B867.00M
EBITDA1.71B1.03B825.00M877.00M894.00M602.00M
Net Income726.00M874.00M311.00M397.00M446.00M212.00M
Balance Sheet
Total Assets14.34B14.38B6.83B6.83B5.82B5.27B
Cash, Cash Equivalents and Short-Term Investments172.00M94.00M29.00M82.00M25.00M97.00M
Total Debt8.20B8.00B4.11B4.12B3.79B3.67B
Total Liabilities10.19B10.31B5.85B5.89B5.00B4.63B
Stockholders Equity4.16B4.07B978.00M942.00M811.00M632.00M
Cash Flow
Free Cash Flow14.00M205.00M385.00M375.00M369.00M378.00M
Operating Cash Flow418.00M549.00M600.00M561.00M543.00M502.00M
Investing Cash Flow600.00M477.00M-288.00M-464.00M-387.00M-120.00M
Financing Cash Flow-1.06B-961.00M-365.00M-40.00M-228.00M-306.00M

Sunoco Technical Analysis

Technical Analysis Sentiment
Positive
Last Price55.03
Price Trends
50DMA
54.90
Positive
100DMA
55.51
Negative
200DMA
53.50
Positive
Market Momentum
MACD
-0.17
Negative
RSI
55.57
Neutral
STOCH
84.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SUN, the sentiment is Positive. The current price of 55.03 is above the 20-day moving average (MA) of 53.37, above the 50-day MA of 54.90, and above the 200-day MA of 53.50, indicating a bullish trend. The MACD of -0.17 indicates Negative momentum. The RSI at 55.57 is Neutral, neither overbought nor oversold. The STOCH value of 84.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SUN.

Sunoco Peers Comparison

Overall Rating
UnderperformOutperform
Sector (52)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
SUSUN
73
Outperform
$8.32B9.7926.11%6.59%-3.59%22.77%
UGUGP
71
Outperform
$3.59B9.1914.87%4.73%-4.58%-23.80%
66
Neutral
$8.32B35.13-1.49%4.59%-11.17%-109.60%
CVCVI
54
Neutral
$2.97B268.82-27.14%15.30%-16.21%-130.18%
52
Neutral
C$2.91B-1.09-3.26%6.12%5.32%-43.41%
DKDK
51
Neutral
$1.41B-151.69%4.41%-29.23%-931.43%
PBPBF
48
Neutral
$2.79B-18.01%4.62%-16.30%-160.78%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SUN
Sunoco
55.03
2.35
4.46%
CVI
CVR Energy
29.86
5.14
20.79%
DK
Delek US Holdings
23.13
1.30
5.96%
DINO
HF Sinclair Corporation
44.16
-3.28
-6.91%
UGP
Ultrapar Participacoes SA
3.38
-0.62
-15.50%
PBF
PBF Energy
24.10
-16.84
-41.13%

Sunoco Corporate Events

M&A TransactionsBusiness Operations and Strategy
Sunoco Amends Acquisition Agreement with Parkland
Neutral
May 29, 2025

On May 26, 2025, Sunoco LP amended its arrangement agreement with Parkland Corporation to adjust the funding mechanics and proration formula for their acquisition plan, while maintaining other key terms. This amendment is part of Sunoco’s strategic acquisition of Parkland, valued at approximately $9.1 billion, expected to close in the second half of 2025, pending shareholder and regulatory approvals. The acquisition is part of Sunoco’s broader strategy, which included the completed acquisition of NuStar Energy in May 2024 and the sale of convenience stores to 7-Eleven in April 2024, reflecting a significant shift in its operational focus and market positioning.

The most recent analyst rating on (SUN) stock is a Buy with a $59.00 price target. To see the full list of analyst forecasts on Sunoco stock, see the SUN Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Sunoco’s Acquisition of Parkland and Indenture Amendments
Neutral
May 28, 2025

On May 4, 2025, Sunoco entered into an Arrangement Agreement to acquire all outstanding common shares of Parkland Corporation. In connection with this transaction, Parkland announced a private consent solicitation on May 27, 2025, to amend the indentures governing its outstanding senior notes. This amendment aims to eliminate the obligation for a Change of Control Offer and redefine ‘Change of Control’ to recognize Sunoco and its affiliates as ‘Qualified Owners.’ Sunoco has agreed to reimburse Parkland for any consent fees and related costs incurred during this process.

The most recent analyst rating on (SUN) stock is a Buy with a $59.00 price target. To see the full list of analyst forecasts on Sunoco stock, see the SUN Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Sunoco Amends Credit Agreement with Bank of America
Neutral
May 20, 2025

On May 16, 2025, Sunoco LP amended its Third Amended and Restated Credit Agreement with Bank of America and other lenders. The amendment increased the letter of credit sublimit to $250 million, excluded Parkland and its subsidiaries from certain guarantee requirements, and allowed the partnership to incur specific types of bridge debt. Additionally, $1.50 billion of previously disclosed debt financing commitments were terminated.

The most recent analyst rating on (SUN) stock is a Buy with a $59.00 price target. To see the full list of analyst forecasts on Sunoco stock, see the SUN Stock Forecast page.

M&A TransactionsDividendsFinancial Disclosures
Sunoco Announces Q1 2025 Results and Acquisitions
Positive
May 6, 2025

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.

Executive/Board Changes
Sunoco Board Member Christopher Curia Announces Retirement
Neutral
Apr 28, 2025

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.

DividendsBusiness Operations and Strategy
Sunoco Announces Increased Cash Distribution for Q1 2025
Positive
Apr 23, 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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025