Suncor Swings to Profit in Q3; Shares Pop

Oil producer Suncor Energy (SU) reported a profit in the third quarter of 2021, compared to a loss a year ago as crude prices rebounded from pandemic lows.

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Funds from operations increased from C$1.2 billion (C$0.76 per share) to C$2.6 billion (C$1.79 per share) in the quarter ended September 30.

Operating earnings came in at C$1 billion (C$0.71 per share), compared with an operating loss of C$338 million (C$0.22) per share a year ago.

Net earnings amounted to C$877 million (C$0.59 per share) in Q3 2021, up from a net loss of C$12 million (C$0.01 per share) in Q3 2020.

Total upstream production reached 698,600 barrels of oil equivalent per day (boe/d) in the third quarter, up from 616,200 boe/d a year earlier.

Suncor president and CEO Mark Little said, “In the third quarter of 2021, Suncor generated funds from operations of $2.6 billion, underpinned by strong results from the Refining & Marketing business and including the significant planned turnaround at Oil Sands Base.

“Since the start of 2021, we have returned $2.6 billion to our shareholders through share repurchases and dividends and have reduced net debt by $3.1 billion, demonstrating significant progress towards fortifying our balance sheet and meeting our capital allocation targets for the year.”

Suncor has restored its dividend to 2019 pre-pandemic levels of C$0.42 per share, an increase of 100% from the prior quarter dividend. (See Insiders’ Hot Stocks on TipRanks)

On October 19, Raymond James analyst George Huang maintained a Buy rating on SU with a C$43 price target. This implies 38.6% upside potential.

Overall, consensus among Wall Street analysts is that SU is a Moderate Buy based on eight Buys and four Holds. The average Suncor Energy price target of C$36.01 implies 19.1% upside potential to current levels.