Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 13 May, 25 | SU | Buy | CAD 50.17 | CAD 52.8 | CAD 53.8 | 30 days | Closed |
5.50%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Suncor Energy Inc. operates as an integrated energy company in Canada, the United States, and internationally. It operates through Oil Sands; Exploration and Production; and Refining and Marketing segments. The Oil Sands segment produces bitumen; and markets, supplies, and transports and manages crude oil, power, and byproducts. The Exploration and Production segment is involved in the offshore operations on the east coast of Canada, and onshore assets in Libya and Syria; and marketing and risk management of crude oil. The Refining and Marketing segment refines and supplies crude oil and intermediate feedstock into a range of petroleum and petrochemical products, as well as sells refined petroleum products to retail customers. This segment is also involved in the trading of crude oil and refined products, natural gas, and power. The company was formerly known as Suncor Inc. and changed its name to Suncor Energy Inc. in April 1997. Suncor Energy Inc. was founded in 1917 and is headquartered in Calgary, Canada.
Higher Asset Turnover Ratio: 0.57x in FY 2024 vs 0.40x of Industry Median
Higher Gross Margin: 62.3% in FY 2024 vs 55.2% of Industry Median
Lower Operating Margin: 17.5% in FY 2024 vs 22.1% of Industry Median
Lower EBITDA Margin: 32.0% in FY 2024 vs 46.0% of Industry Median
Commodity Price Volatility, Regulatory Risks, Trade Tariff, Inflationary Pressures, etc
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 50.17 | 46.8 | 52.8 | 53.8 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Operational Performance: The company achieved its highest ever Q1 2025 upstream production at 853,200 bbls/d which signals decent asset performance and operational reliability. Refinery utilization of 104% and record Q1 2025 refined product sales (604,900 bbls/d) reflect the strength of SU's downstream segment. This dual-segment strength (upstream and downstream) reaffirms the value of the company's integrated business model, which provides stability during periods of market volatility.
Healthy Free Funds Flow: SU's Free funds flow of CAD 1.9 bn in Q1 2025 was stable YoY despite slight declines in adjusted FFO, which provides ample flexibility for capital returns and debt reduction. The company returned CAD 1.5 bn to shareholders in Q1 2025 through dividends and buybacks, emphasizing shareholder alignment.
Disciplined Capital Allocation and Debt Reduction: Net debt declined YoY from CAD 9.55 bn to CAD 7.56 bn, (a reduction of CAD ~2 bn) indicating improving balance sheet flexibility. The company is maintaining investment grade balance sheet strength while also increasing shareholder returns. Lower Capex without sacrificing production points to operational efficiency gains.
Considering the expected valuation upside, improved financial flexibility, decent dividend payout, integrated business model, a ‘Buy’ recommendation has been given on the stock at the last closing price of CAD 50.17, as on May 12, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Oil & Gas Integrated
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| SU Suncor Energy Inc |
-0.13 0.25% | 52.04 | 10.88 | 14.35 | 1.27 | 1.47 | 1.42 | 4.88 |
| IMO Imperial Oil Ltd |
0.45 0.41% | 110.76 | 11.60 | 14.27 | 1.06 | 2.26 | 1.18 | 6.86 |
| CVE Cenovus Energy Inc |
0.005 0.03% | 19.20 | 12.38 | 12.58 | 0.63 | 1.16 | 0.74 | 4.62 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 12, 2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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