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Sunoco LP (SUN)
:SUN
US Market
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Sunoco (SUN) AI Stock Analysis

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SUN

Sunoco

(NYSE:SUN)

Rating:66Neutral
Price Target:
$56.00
▲(10.13% 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
Distribution Growth
The company signaled that distribution growth could be 'at least 5%' for the fiscal year and potentially beyond.
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
Lack of AI 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.
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 (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 MoneySunoco 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 Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
Sunoco LP's earnings call reflected a strong financial performance with record second quarter results and positive developments in acquisitions and growth capital strategies. However, there were some challenges noted in fuel distribution margins and volumes. Overall, the sentiment is optimistic with a focus on growth and strategic acquisitions.
Q2-2025 Updates
Positive Updates
Record Second Quarter Performance
Sunoco LP delivered a record second quarter with adjusted EBITDA of $464 million and distributable cash flow as adjusted of $300 million.
Increased Distribution
Declared a second quarter distribution of $0.9088 per common unit, a 1.25% increase compared with the previous quarter, marking the third consecutive quarterly increase.
Strong Pipeline and Terminal Segments
The Pipeline Systems segment reported adjusted EBITDA of $177 million, showing growth from previous quarters, and the Terminal segment delivered adjusted EBITDA of $73 million, up from the first quarter and last year.
NuStar Acquisition Success
The NuStar acquisition has been described as outstanding, enhancing the scale and efficiency of the Pipeline and Terminals segments.
Positive Outlook on Parkland Acquisition
The Parkland acquisition received strong endorsement and is expected to deliver double-digit accretion while maintaining a strong balance sheet.
Robust Growth Capital Strategy
On track to meet 2025 projected capital spend with a minimum of $400 million for growth capital and $150 million for maintenance capital.
Negative Updates
Decreased Fuel Distribution Margins
Reported margin for the second quarter was $0.105 per gallon compared to $0.115 in the first quarter and $0.118 in the second quarter of 2024.
Challenges in Fuel Distribution Volumes
Fuel Distribution volumes were flat compared to the second quarter of last year, despite a 5% increase from last quarter.
Company Guidance
During Sunoco LP's Second Quarter 2025 Earnings Conference Call, the company provided several key financial metrics and guidance for the remainder of the year. Sunoco reported a record second quarter with an adjusted EBITDA of $464 million, excluding $10 million in one-time transaction-related expenses, and distributable cash flow as adjusted at $300 million. They spent approximately $120 million on growth capital and $40 million on maintenance capital, with projections for the 2025 fiscal year including at least $400 million in growth capital and $150 million in maintenance capital. The company declared a distribution of $0.9088 per common unit for the second quarter, marking a 1.25% increase from the previous quarter. The leverage at the end of the quarter was below 4.2x, with $200 million outstanding on their $1.5 billion revolving credit facility. Sunoco's Fuel Distribution segment reported adjusted EBITDA of $214 million, while the Pipeline Systems and Terminal segments reported $177 million and $73 million respectively. The company is optimistic about closing its acquisition of Parkland and TanQuid in the fourth quarter, expecting these acquisitions to drive double-digit accretion and further distribution growth.

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
65
Positive
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
58
Neutral
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
72
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue21.59B22.69B23.07B25.73B17.60B10.71B
Gross Profit1.71B1.73B1.18B1.19B1.17B867.00M
EBITDA712.00M1.03B825.00M877.00M894.00M602.00M
Net Income279.00M716.00M311.00M397.00M446.00M135.00M
Balance Sheet
Total Assets14.43B14.38B6.83B6.83B5.82B5.27B
Cash, Cash Equivalents and Short-Term Investments116.00M94.00M29.00M82.00M25.00M97.00M
Total Debt8.34B8.00B4.11B4.12B3.79B3.67B
Total Liabilities10.33B10.31B5.85B5.89B5.00B4.63B
Stockholders Equity4.10B4.07B978.00M942.00M811.00M632.00M
Cash Flow
Free Cash Flow234.00M205.00M385.00M375.00M369.00M378.00M
Operating Cash Flow728.00M549.00M600.00M561.00M543.00M502.00M
Investing Cash Flow-596.00M477.00M-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 Price50.85
Price Trends
50DMA
52.25
Negative
100DMA
53.21
Negative
200DMA
53.16
Negative
Market Momentum
MACD
-0.27
Positive
RSI
40.29
Neutral
STOCH
16.74
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 50.85 is below the 20-day moving average (MA) of 51.86, below the 50-day MA of 52.25, and below the 200-day MA of 53.16, indicating a bearish trend. The MACD of -0.27 indicates Positive momentum. The RSI at 40.29 is Neutral, neither overbought nor oversold. The STOCH value of 16.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SUN.

Sunoco Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$9.65B35.13-0.93%3.91%-14.58%-107.50%
74
Outperform
$3.96B7.7518.65%3.42%-6.18%-9.87%
66
Neutral
$7.83B25.356.62%6.97%-8.65%-73.25%
65
Neutral
$15.28B7.483.22%5.33%4.10%-60.58%
55
Neutral
$3.11B268.82-50.65%8.91%-15.98%-160.88%
51
Neutral
$1.92B-200.75%3.20%-29.94%-723.41%
51
Neutral
$3.30B-17.30%3.89%-18.73%-236.79%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SUN
Sunoco
50.85
1.89
3.86%
CVI
CVR Energy
31.43
9.05
40.44%
DK
Delek US Holdings
31.32
13.64
77.15%
DINO
HF Sinclair Corporation
51.10
7.80
18.01%
UGP
Ultrapar Participacoes SA
3.90
-0.23
-5.57%
PBF
PBF Energy
28.51
-2.03
-6.65%

Sunoco Corporate Events

Private Placements and FinancingM&A Transactions
Sunoco Announces $1.9 Billion Senior Notes Offering
Neutral
Sep 5, 2025

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.

Private Placements and FinancingM&A Transactions
Sunoco Announces Private Offering for Parkland Acquisition
Neutral
Sep 4, 2025

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.

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Sunoco Amends Credit Agreement for Parkland Acquisition
Positive
Aug 8, 2025

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.

M&A TransactionsFinancial Disclosures
Sunoco Announces Q2 2025 Financial Results and Merger Approval
Neutral
Aug 6, 2025

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.

DividendsBusiness Operations and Strategy
Sunoco Increases Quarterly Cash Distribution by 1.25%
Positive
Jul 24, 2025

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.

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: Sep 03, 2025