Shares of Sunoco LP (NYSE:SUN) have received an average rating of “Moderate Buy” from eight brokerages currently covering the stock, according to MarketBeat.com. Analysts have issued a mix of opinions, with one rating it as a sell, another as a hold, and six providing buy recommendations. The average one-year price target among these brokerages stands at $64.83.
In recent reports, various financial institutions have shared their outlook on Sunoco. Barclays reaffirmed an “overweight” rating and set a price target of $57.00 for the shares on November 17, 2023. Conversely, Zacks Research downgraded Sunoco from a “hold” to a “strong sell” classification in a report dated November 4, 2023. Meanwhile, Weiss Ratings maintained a “hold (C+)” rating on November 24, 2023, and Raymond James Financial reiterated an “outperform” rating, issuing a price target of $70.00 on November 5, 2023. Finally, Wells Fargo & Company assigned a price objective of $65.00 and rated the stock as “overweight” in a note released on October 29, 2023.
Financial Performance and Dividend Increase
Sunoco reported its latest quarterly earnings on November 5, 2023. The oil and gas company recorded earnings per share (EPS) of $0.64, falling short of analysts’ consensus estimates of $1.54 by $0.90. Despite this miss, the company achieved a net margin of 2.02% and a return on equity of 10.57%. Revenue for the quarter was $6.03 billion, which exceeded the consensus estimate of $5.59 billion. This represents a 4.9% increase in revenue compared to the same quarter last year, during which the company reported an EPS of ($0.26).
Additionally, Sunoco recently announced an increase in its quarterly dividend, which was paid out on November 19, 2023. Shareholders of record as of October 30, 2023 received a dividend of $0.9202 per share, translating to an annualized dividend of $3.68 and a yield of 6.6%. This marks an increase from the previous quarterly dividend of $0.91. The company’s dividend payout ratio currently stands at 125.60%.
Institutional Activity and Company Overview
Recent trading activities indicate a growing interest in Sunoco among institutional investors. For instance, Bank of New York Mellon Corp acquired a new position valued at approximately $248,000 during the first quarter. Envestnet Asset Management Inc. increased its stake in Sunoco by 6.0%, now holding 32,603 shares valued at $1.89 million after purchasing an additional 1,845 shares. Similarly, Avantax Advisory Services Inc. grew its stake by 6.7%, now owning 12,912 shares worth $750,000. LPL Financial LLC and Sheaff Brock Investment Advisors LLC also made notable acquisitions, contributing to institutional ownership of 24.29% of the company’s stock.
Sunoco LP, along with its subsidiaries, focuses on distributing and retailing motor fuels across the United States. The company operates through two segments: Fuel Distribution and Marketing, and All Other. The Fuel Distribution and Marketing segment procures motor fuel and other petroleum products, including propane and lubricating oil, from independent refiners and oil companies. The products are then supplied to company-operated retail stores, commission agents, and various commercial customers.
As analysts continue to evaluate Sunoco’s performance amid fluctuating market conditions, the mixed ratings and financial results highlight the complexities facing investors in the oil and gas sector.
