Sunoco (SUN): Examining Valuation as Shares Rebound After Recent Pullback

Sunoco (SUN) shares have edged up about 3% in the past week. Over the past month, however, the stock is down nearly 3%, sparking questions about what could be driving momentum for the energy distributor.

See our latest analysis for Sunoco.

Stepping back, Sunoco's 7.56% total shareholder return over the past year highlights steady progress, even as momentum appears muted after a recent dip. While short-term share price swings have sparked some debate, the long-term picture suggests consistent value creation for investors.

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As Sunoco's share price fluctuates near a 24% discount to analyst targets despite strong revenue and profit growth, investors may be wondering if the stock is on sale for savvy buyers or if the market is fully factoring in its future prospects.

Most Popular Narrative: 18.9% Undervalued

The most widely tracked narrative points to a fair value of $64.71 compared to Sunoco’s last close of $52.50. Key future growth drivers are expected to support this estimate and could reshape the outlook if they materialize as projected.

The NuStar and upcoming Parkland and TanQuid acquisitions are expected to deliver substantial double-digit accretion and cost synergies, further increasing operating leverage and net margins while materially enhancing Sunoco's international and midstream asset footprint.

Read the complete narrative.

Wondering what assumptions give Sunoco such a high estimated value? The calculation relies on profit margin expansion and a future profit multiple that differs from current industry norms. What bold analyst projections fuel this bullish case? See the critical details powering the fair value for yourself.

Result: Fair Value of $64.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Sunoco’s reliance on fossil fuels and rising competition could challenge its profit growth and jeopardize future revenue projections.

Find out about the key risks to this Sunoco narrative.

Build Your Own Sunoco Narrative

If you want to approach Sunoco’s story from your own angle or dive deeper into the numbers, creating a custom narrative is quick and straightforward. It takes just a few minutes. Do it your way

A great starting point for your Sunoco research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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