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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:68Neutral
Price Target:
$58.00
▲(8.88%Upside)
Sunoco's overall score reflects a strong earnings call and corporate strategy, offset by technical weaknesses. Financial leverage and cash flow concerns are risks, but attractive valuation and dividend yield provide support.
Positive Factors
Distribution Growth
The company signaled that distribution growth could be 'at least 5%' for the fiscal year and potentially beyond.
Earnings and Guidance
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 Expenditures
Capex for 2025 is expected to be much higher than both the consensus and previous forecasts.
MLP Structure 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 (SUN) vs. SPDR S&P 500 ETF (SPY)

Sunoco Business Overview & Revenue Model

Company DescriptionSunoco LP (SUN) is a master limited partnership engaged in the distribution and retailing of motor fuels in the United States. The company operates through various fuel distribution channels, serving independent dealers, commercial customers, and distributors with a network of convenience stores and retail fuel sites under recognized brands. Sunoco is known for its quality fuel products and services, catering to a broad customer base across the country.
How the Company Makes MoneySunoco LP generates revenue primarily through the distribution and sale of motor fuels. The company supplies fuel to a wide range of customers, including independent dealers, commercial accounts, and distributors. It also operates retail fuel sites and convenience stores, where it sells fuel and other convenience products. Sunoco's revenue streams are bolstered by its strategic partnerships and long-term fuel supply agreements. Additionally, Sunoco benefits from its extensive network of retail and wholesale fuel distribution channels, which enhance its market reach and profitability.

Sunoco Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: -0.80%|
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
22.37B22.69B23.07B25.73B17.60B10.71B
Gross Profit
1.78B2.10B1.18B1.19B1.17B867.00M
EBIT
836.00M791.00M635.00M477.00M562.00M237.00M
EBITDA
1.71B1.03B825.00M877.00M894.00M602.00M
Net Income Common Stockholders
726.00M874.00M311.00M397.00M446.00M212.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
189.00M94.00M29.00M82.00M25.00M97.00M
Total Assets
6.55B14.38B6.83B6.83B5.82B5.27B
Total Debt
4.02B8.00B4.11B4.12B3.79B3.67B
Net Debt
3.83B7.91B4.08B4.04B3.77B3.57B
Total Liabilities
5.55B10.31B5.85B5.89B5.00B4.63B
Stockholders Equity
0.004.07B978.00M942.00M811.00M632.00M
Cash FlowFree Cash Flow
14.00M205.00M385.00M375.00M369.00M378.00M
Operating Cash Flow
418.00M549.00M600.00M561.00M543.00M502.00M
Investing Cash Flow
600.00M477.00M-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
Negative
Last Price53.27
Price Trends
50DMA
55.29
Negative
100DMA
55.74
Negative
200DMA
53.29
Negative
Market Momentum
MACD
-0.73
Positive
RSI
42.48
Neutral
STOCH
17.96
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 53.27 is below the 20-day moving average (MA) of 55.09, below the 50-day MA of 55.29, and below the 200-day MA of 53.29, indicating a bearish trend. The MACD of -0.73 indicates Positive momentum. The RSI at 42.48 is Neutral, neither overbought nor oversold. The STOCH value of 17.96 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 (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
71
Outperform
$7.03B35.13-1.49%5.45%-11.17%-109.60%
UGUGP
71
Outperform
$3.18B7.9614.87%3.70%-4.58%-23.80%
SUSUN
68
Neutral
$8.14B9.5826.11%6.74%-3.59%22.77%
58
Neutral
$7.35B3.36-4.49%5.60%0.82%-49.15%
CVCVI
53
Neutral
$2.36B268.82-27.14%8.40%-16.21%-130.18%
DKDK
51
Neutral
$1.16B-151.69%5.33%-29.23%-931.43%
PBPBF
48
Neutral
$2.12B-18.01%5.66%-16.30%-160.78%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SUN
Sunoco
53.27
4.18
8.51%
CVI
CVR Energy
24.72
-2.25
-8.34%
DK
Delek US Holdings
19.61
-3.73
-15.98%
DINO
HF Sinclair Corporation
37.31
-13.42
-26.45%
UGP
Ultrapar Participacoes SA
3.04
-1.05
-25.67%
PBF
PBF Energy
20.24
-24.00
-54.25%

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.

Private Placements and FinancingBusiness Operations and Strategy
Sunoco Upsizes Private Offering to $1 Billion
Positive
Mar 20, 2025

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.

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Sunoco Announces $750M Senior Notes Offering
Positive
Mar 20, 2025

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.

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.