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Suncor Energy (TSE:SU)
TSX:SU
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Suncor Energy
(TSX:SU)
73Outperform
Positive Factors
Free Cash Flow
Suncor Energy has made progress on Investor Day targets with year-over-year free cash flow growth.
Operational Performance
Suncor Energy reported strong operational performance, which was pre-released.
Negative Factors
Tariff Risks
The possibility of US oil or refined product tariffs on Canada are a significant negative risk going forward.
Suncor Energy (SU) vs. S&P 500 (SPY)
Market Cap
$63.13B
Dividend Yield4.51%
Average Volume (3M)11.06M
Price to Earnings (P/E)10.9
Beta (1Y)0.99
Revenue Growth3.25%
EPS Growth-25.69%
CountryCA
Employees15,010
SectorEnergy
Sector Strength73
IndustryFossil Fuels
Share Statistics
EPS (TTM)4.71
Shares Outstanding1,237,135,600
10 Day Avg. Volume17,145,053
30 Day Avg. Volume11,064,917
Financial Highlights & Ratios
PEG Ratio13.47
Price to Book (P/B)N/A
Price to Sales (P/S)1.18
Price to Cash Flow (P/CF)3.20
P/FCF Ratio4.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$63.34Price Target Upside24.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Suncor Energy Business Overview & Revenue Model
Company DescriptionSuncor Energy, Inc. is a Canada-based integrated energy company which is specialized in producing synthetic crude from oil sands. The company also engages in exploration, acquisition, development, production, and marketing of crude oil in Canada and internationally. It also markets and trades in natural gas, crude oil, byproducts, refined products, and power.
How the Company Makes MoneySuncor Energy generates revenue through a diverse range of activities within the oil and gas sector. The company earns money primarily through the extraction and production of crude oil and natural gas, particularly from its operations in Canada's oil sands. A significant portion of its revenue comes from refining crude oil into various petroleum products, such as gasoline, diesel, and jet fuel, which are then sold to wholesalers, retailers, and directly to consumers. Additionally, Suncor operates a network of retail stations under the Petro-Canada brand, providing another revenue stream through fuel and convenience store sales. The company's earnings are also influenced by its strategic partnerships and joint ventures, which help optimize resource development and operational efficiencies. Suncor's financial performance is significantly affected by global oil prices, regulatory frameworks, and technological advancements in energy production and sustainability.
Suncor Energy Financial Statement Overview
Summary
Suncor Energy has shown strong financial recovery and stability post-2020 with solid revenue growth and cash flow management. While the income statement reflects improved revenue and gross margin, the absence of EBIT in 2024 is a concern. The balance sheet is strong with improved leverage ratios, but declining ROE indicates potential efficiency issues. Overall, the financial health is robust, with a strong cash flow position supporting future investments and operations.Income Statement
The company showed a strong recovery in revenue and profitability after the 2020 downturn. The gross profit margin for 2024 was approximately 40.8%, a notable improvement from 2020. However, the net profit margin dropped to 10.96% in 2024 from 16.9% in 2023. Revenue growth from 2023 to 2024 was 11.8%, indicating positive momentum, but the lack of EBIT in 2024 raises questions about operational efficiency.75
Positive
Balance Sheet
The debt-to-equity ratio improved to 0.33 in 2024, reflecting a stronger equity base compared to liabilities. Return on equity was 13.52% in 2024, showing a decline from previous years, indicating reduced efficiency in generating profit from shareholders' equity. The equity ratio remained stable at 49.6%, suggesting a balanced capital structure.70
Positive
Cash Flow
The company demonstrated strong cash flow generation capabilities with a free cash flow of $9.48 billion in 2024, a significant increase from 2023. The operating cash flow to net income ratio was 2.65, indicating robust cash generation relative to earnings. The free cash flow to net income ratio was 1.57, reflecting efficient capital expenditure management.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 54.88B | 49.09B | 58.34B | 39.13B | 24.66B | Gross Profit |
| 22.38B | 19.54B | 28.77B | 19.49B | 6.02B | EBIT |
| 0.00 | 8.68B | 14.40B | 6.70B | -5.26B | EBITDA |
| 15.84B | 18.33B | 22.28B | 12.63B | 2.55B | Net Income Common Stockholders |
| 6.02B | 8.29B | 9.08B | 4.12B | -4.32B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.48B | 1.73B | 1.98B | 2.21B | 1.89B | Total Assets |
| 89.78B | 88.54B | 84.62B | 83.74B | 84.62B | Total Debt |
| 14.69B | 15.80B | 15.62B | 18.35B | 21.70B | Net Debt |
| 11.21B | 14.08B | 13.64B | 16.15B | 19.81B | Total Liabilities |
| 45.27B | 45.26B | 45.25B | 47.13B | 48.86B | Stockholders Equity |
| 44.51B | 43.28B | 39.37B | 36.61B | 35.76B |
| Cash Flow | Free Cash Flow | |||
| 9.48B | 6.52B | 10.56B | 7.21B | -1.25B | Operating Cash Flow |
| 15.96B | 12.34B | 15.68B | 11.76B | 2.67B | Investing Cash Flow |
| -6.47B | -6.51B | -4.79B | -3.98B | -4.52B | Financing Cash Flow |
| -7.88B | -5.99B | -11.23B | -7.46B | 1.79B |
Suncor Energy Technical Analysis
Negative
51.03
Price Trends
54.35
Negative
53.69
Negative
52.47
Negative
Market Momentum
-1.13
Positive
38.10
Neutral
36.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SU, the sentiment is Negative. The current price of 51.03 is below the 20-day moving average (MA) of 53.90, below the 50-day MA of 54.35, and below the 200-day MA of 52.47, indicating a bearish trend. The MACD of -1.13 indicates Positive momentum. The RSI at 38.10 is Neutral, neither overbought nor oversold. The STOCH value of 36.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:SU.
Suncor Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Performance Comparison
TSE:SU
Suncor Energy
51.03
5.73
12.64%
CNQ
Canadian Natural
28.73
-5.67
-16.48%
CVE
Cenovus Energy
12.95
-4.37
-25.23%
IMO
Imperial Oil
66.40
1.99
3.09%
MEGEF
MEG Energy
15.86
-5.48
-25.68%
TSE:TOU
Tourmaline Oil
64.99
7.97
13.98%
Suncor Energy Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -6.94% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
Suncor delivered a record-breaking performance in 2024, with significant improvements in safety, production, and financial metrics. However, the company faces challenges in the form of a volatile business environment and increased maintenance activities in 2025.Highlights
Record Safety Performance
Achieved the safest year ever in 2024, with lost time injuries down 30% year-on-year and down 60% over the last 2 years. Recordable injuries were down 16% year-on-year or 30% over the last 2 years.
Upstream Production Milestone
Full year upstream production reached 828,000 barrels a day, the best in company history, with a 6.5% increase from the previous best and 11% higher than 2023.
Refining and Utilization Success
Full year refining throughput was 465,000 barrels a day, the highest in history, with a 5.5% increase from the previous best and 10.5% higher than 2023.
Financial Achievements
Generated $7.4 billion in free funds flow, maintained net debt at $8 billion target, and returned $5.7 billion to shareholders in dividends and buybacks.
Operating Cost Reduction
Total OS&G expenses were down $324 million year-on-year, despite increased production and throughput, showcasing strong cost management.
Lowlights
Challenging Business Environment
Faced headwinds in the business environment with a $1.5 billion decrease in free funds flow due to lower downstream cracks and differentials.
Maintenance and Turnaround Impacts
2025 is expected to be a heavier planned maintenance year with significant turnarounds at base plant and refineries, posing potential risks to operational continuity.
Company Guidance
During Suncor Energy's fourth quarter 2024 financial results call, the company provided comprehensive guidance metrics emphasizing strong operational performance and strategic achievements. The key highlights include a record upstream production of 828,000 barrels per day, 11% higher than 2023, and surpassing guidance by 18,000 barrels per day. Upgrader utilization reached a historic high of 98%, with refining throughput averaging 465,000 barrels per day, exceeding the previous best by 5.5%. The company also reported a 100% refining utilization rate, with Edmonton leading at 105%. Suncor achieved $13.1 billion in total operating, selling, and general expenses, reflecting a decrease of $324 million year-over-year despite increased production and refining volumes. The capital expenditure for the year was $6.2 billion, below the midpoint of guidance, while free funds flow remained steady at $7.4 billion, countering a $1.5 billion decline in business environment impacts. The company returned $5.7 billion to shareholders via buybacks and dividends, highlighting a strategic focus on shareholder value. Looking ahead to 2025, Suncor projects upstream production between 810,000 to 840,000 barrels per day and refining utilization of 93% to 97%, with capital guidance set at $6.1 billion to $6.3 billion. The company aims to build on the operational momentum from 2024, focusing on cost management and further growth initiatives.Suncor Energy Corporate Events
Stock BuybackBusiness Operations and StrategyRegulatory Filings and Compliance
Suncor Energy Renews Share Buyback Program Amid Annual Disclosure Filing
Positive
Feb 27, 2025
Suncor Energy has filed its 2024 annual disclosure documents and announced the renewal of its Normal Course Issuer Bid (NCIB), allowing the company to repurchase up to 10% of its public float. This move is seen as an attractive investment opportunity and aligns with the company’s strategy to enhance shareholder value without impacting its long-term goals.
Financial Disclosures
Suncor Energy to Announce Q4 2024 Financial Results
Neutral
Jan 22, 2025
Suncor Energy announced it will release its fourth quarter financial results on February 5, 2025, followed by a webcast on February 6, 2025. The webcast will feature insights from top executives, offering stakeholders a chance to engage through a Q&A session. This announcement is part of Suncor’s ongoing commitment to transparency and may impact investor sentiment and market positioning.
Suncor Energy Reports Record Operational Results for 2024
Jan 6, 2025
Suncor Energy has announced record operational results for both the fourth quarter and the full year of 2024. In its upstream sector, the company achieved record quarterly production of 874,000 barrels per day, with upgrader utilization exceeding 100%. Annual production also reached a new high of 827,000 barrels per day, surpassing guidance expectations. In the downstream segment, Suncor set records in refining throughput and utilization, with an annual throughput of 465,000 barrels per day and utilization rates at 100% or higher across its refineries. These results highlight Suncor’s strong operational efficiency and capacity enhancements, positioning the company favorably in the energy market.
Suncor Energy Sets Ambitious 2025 Growth Plans
Dec 12, 2024
Suncor Energy has unveiled its 2025 corporate guidance, highlighting plans to increase upstream production and enhance refining utilization, while maintaining a disciplined capital investment strategy. The company’s focus on boosting free funds flow per share through increased volumes and cost reductions aligns with its commitments from the 2024 Investor Day. Major investments include the replacement of Upgrader 1 coke drums and development projects at Mildred Lake and West White Rose.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.