Energy distributor Sunoco LP (NYSE:SUN) has agreed to sell 204 convenience stores to 7-Eleven for nearly $1 billion. These stores are located in West Texas, New Mexico, and Oklahoma.
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Under the M & A deal, Sunoco will amend its fuel supply agreement with 7-Eleven to include additional fuel gross profit. The company plans to utilize the proceeds from this deal to substantially pare down its debt.
Further, Sunoco plans to acquire a 100% equity interest in Zenith Energy Netherlands Amsterdam B.V. With this move, the company will gain control of strategic liquid fuels terminals in Amsterdam, Netherlands, and Bantry Bay, Ireland. This tuck-in acquisition is expected to offer supply optimization for the company’s existing East Coast business.
In addition, Sunoco reaffirmed its Fiscal 2024 EBITDA outlook of between $975 million and $1 billion. The company’s fourth-quarter results are coming up on February 14. Analysts expect Sunoco to generate an EPS of $1.13 on revenue of $5.5 billion for the quarter.
Is SUN Stock a Buy, Sell, or Hold?
Shares of the company have surged by nearly 31% over the past year. Overall, the Street has a Moderate Buy consensus rating on Sunoco, and the average SUN price target of $55.67 points to a potential downside of 4% in the stock.
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