Suncor Energy downgraded amid market uncertainty and competition risks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 15 2025
0mins
Should l Buy SU?
Source: Business Insider
Suncor Energy Inc (SU) reached a 52-week high despite broader market declines, with the Nasdaq-100 down 1.66% and the S&P 500 down 0.97%.
Analysts have downgraded Suncor Energy amid concerns about market uncertainty following political changes in Venezuela, which could lead to increased competition for Canadian heavy oil producers. The potential return of Venezuelan crude poses a risk to Suncor's market share, especially as prices for Western Canadian Select (WCS) have crashed, raising doubts about future profitability.
This downgrade reflects a cautious outlook for Suncor and similar companies, as analysts recommend avoiding investments in small-cap oil and gas stocks due to the current economic climate and potential recovery challenges.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy SU?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on SU
Wall Street analysts forecast SU stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for SU is 49.83 USD with a low forecast of 41.06 USD and a high forecast of 70.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 53.130
Low
41.06
Averages
49.83
High
70.00
Current: 53.130
Low
41.06
Averages
49.83
High
70.00
About SU
Suncor Energy Inc. is a Canada-based integrated energy company. The Company's segments include Oil Sands, Exploration and Production (E&P), and Refining and Marketing. Its operations include oil sands development, production and upgrading; offshore oil production; petroleum refining in Canada and the United States; and the Company’s Petro-Canada retail and wholesale distribution networks (including Canada’s Electric Highway, a coast-to-coast network of fast-charging electric vehicle (EV) stations). The Company is developing petroleum resources while advancing the transition to a lower-emissions future through investments in lower-emissions intensity power, renewable feedstock fuels and projects targeting emissions intensity. The Company also conducts energy trading activities focused primarily on the marketing and trading of crude oil, natural gas, byproducts, refined products and power. It also wholly owns the Fort Hills Project, which is located in Alberta's Athabasca region.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Forgent Power Closes First Trading Day Higher Due to Data Center Demand
Company Performance: Forgent Power Solutions saw an increase of over 8% on its first day of trading.
Market Sentiment: The rise in stock price comes as investors are becoming more selective in their investments related to artificial intelligence.
See More
Suncor Energy Q4 Earnings Beat Expectations
- Earnings Surprise: Suncor Energy reported a Q4 non-GAAP EPS of C$1.10, exceeding expectations by C$0.07, indicating ongoing improvements in cost control and operational efficiency, which is likely to have a positive impact on its stock price.
- Optimistic Market Outlook: Analysts suggest that catalysts in Venezuela could benefit Suncor Energy more than Petrobras, highlighting the company's increasing competitiveness in international markets, which may attract more investor interest.
- Value Investment Potential: Suncor is viewed as a value machine, with rising efficiency expected to enhance profitability further, appealing to investors seeking stable returns and potentially driving stock price appreciation.
- Rating Adjustments Impact: J.P. Morgan upgraded ratings for Suncor and Chevron while downgrading ConocoPhillips and Cenovus, reflecting increased market confidence in Suncor's future performance, which may further enhance its market position.
See More
Suncor Energy Reports Q4 Adjusted Earnings
- Earnings Performance: Suncor Energy reported Q4 adjusted earnings of CAD 1.10 (approximately USD 0.81) per share late Tuesday, indicating the company's stable profitability amid current market conditions despite industry fluctuations.
- Market Reaction: Although the earnings data did not exceed market expectations, the company maintains a relatively stable financial performance, which may provide some support for investor confidence.
- Industry Context: In light of increasing uncertainty in the global energy market, Suncor's earnings performance reflects its ongoing efforts in cost control and operational efficiency, enhancing its position in the highly competitive energy sector.
- Future Outlook: As energy demand shifts and market dynamics evolve, Suncor may need to further adjust its strategy to address future challenges, ensuring sustained profitability and market share.
See More
Suncor Energy Set to Release Q4 Earnings on February 3rd
- Earnings Announcement: Suncor Energy is set to announce its Q4 2023 earnings on February 3rd after market close, with consensus EPS estimate at $0.75, reflecting a 40% year-over-year decline, and revenue estimate at $9 billion, indicating a 28% year-over-year drop, highlighting significant profitability challenges.
- Historical Performance Review: Over the past two years, Suncor has exceeded EPS estimates 88% of the time, while only beating revenue estimates 25% of the time, indicating considerable volatility in the company's earnings performance.
- Expectation Adjustment Dynamics: In the last three months, EPS estimates have seen five upward revisions and two downward revisions, while revenue estimates have experienced two upward revisions and one downward revision, reflecting market uncertainty regarding the company's future performance.
- Market Response and Investment Dynamics: J.P. Morgan upgraded ratings for Suncor and Chevron while downgrading ConocoPhillips and Cenovus, indicating increased market confidence in Suncor, which also announced a $1 billion medium-term note offering to enhance financial flexibility.
See More
Momentum Warning for Energy Stocks: VAALCO and Suncor
- VAALCO Energy Analysis: On January 16, Freedom Capital Markets analyst Sergey Pigarev initiated coverage on VAALCO Energy with a Buy rating and a price target of $7.3, as the stock surged approximately 42% over the past month, currently showing an RSI of 89.4, indicating overbought conditions that may lead to a price correction, urging caution among investors.
- Suncor Energy Rating Upgrade: On January 23, Goldman Sachs analyst Neil Mehta maintained a Buy rating on Suncor Energy and raised the price target from $48 to $54, with the stock gaining around 21% in the past month and an RSI of 81.7, suggesting it is also in overbought territory, prompting investors to watch for potential price fluctuations.
- Market Momentum Indicators: The RSI serves as a momentum indicator that compares a stock's strength on up days versus down days; the elevated RSI values for both VAALCO and Suncor signal potential short-term pullback risks, which investors should factor into their trading decisions.
- Investor Caution: With both stocks exhibiting overbought momentum indicators, investors should remain vigilant in pursuit of short-term gains to avoid losses due to market volatility, particularly in the context of increasing fluctuations within the energy sector.
See More
S&P 500 Rises as Trump Withdraws Tariff Threats Against Europe
- Earnings Season Kickoff: The S&P 500 closed higher on Friday, marking the start of a new earnings season, with investor expectations for corporate profits boosting market sentiment.
- Analyst Rating Changes: J.P. Morgan upgraded Chevron (CVX) to Overweight with a $176 price target, citing the company's favorable position following the Hess merger and potential annual savings of $3B-$4B by 2026.
- Netflix Quarterly Report Reaction: Although Netflix's (NFLX) quarterly results were deemed “mixed and underwhelming,” analysts believe its long-term growth potential remains strong, viewing the current stock weakness as a buying opportunity for investors.
- Applied Materials Rating Upgrade: Deutsche Bank upgraded Applied Materials (AMAT) from Neutral to Buy with a $390 price target, reflecting a more favorable semiconductor equipment market environment entering 2026 and 2027, which is expected to drive higher DRAM equipment spending.
See More
Forgent Power Closes First Trading Day Higher Due to Data Center Demand
Company Performance: Forgent Power Solutions saw an increase of over 8% on its first day of trading.
Market Sentiment: The rise in stock price comes as investors are becoming more selective in their investments related to artificial intelligence.
See More
Suncor Energy Q4 Earnings Beat Expectations
- Earnings Surprise: Suncor Energy reported a Q4 non-GAAP EPS of C$1.10, exceeding expectations by C$0.07, indicating ongoing improvements in cost control and operational efficiency, which is likely to have a positive impact on its stock price.
- Optimistic Market Outlook: Analysts suggest that catalysts in Venezuela could benefit Suncor Energy more than Petrobras, highlighting the company's increasing competitiveness in international markets, which may attract more investor interest.
- Value Investment Potential: Suncor is viewed as a value machine, with rising efficiency expected to enhance profitability further, appealing to investors seeking stable returns and potentially driving stock price appreciation.
- Rating Adjustments Impact: J.P. Morgan upgraded ratings for Suncor and Chevron while downgrading ConocoPhillips and Cenovus, reflecting increased market confidence in Suncor's future performance, which may further enhance its market position.
See More
Suncor Energy Reports Q4 Adjusted Earnings
- Earnings Performance: Suncor Energy reported Q4 adjusted earnings of CAD 1.10 (approximately USD 0.81) per share late Tuesday, indicating the company's stable profitability amid current market conditions despite industry fluctuations.
- Market Reaction: Although the earnings data did not exceed market expectations, the company maintains a relatively stable financial performance, which may provide some support for investor confidence.
- Industry Context: In light of increasing uncertainty in the global energy market, Suncor's earnings performance reflects its ongoing efforts in cost control and operational efficiency, enhancing its position in the highly competitive energy sector.
- Future Outlook: As energy demand shifts and market dynamics evolve, Suncor may need to further adjust its strategy to address future challenges, ensuring sustained profitability and market share.
See More
Suncor Energy Set to Release Q4 Earnings on February 3rd
- Earnings Announcement: Suncor Energy is set to announce its Q4 2023 earnings on February 3rd after market close, with consensus EPS estimate at $0.75, reflecting a 40% year-over-year decline, and revenue estimate at $9 billion, indicating a 28% year-over-year drop, highlighting significant profitability challenges.
- Historical Performance Review: Over the past two years, Suncor has exceeded EPS estimates 88% of the time, while only beating revenue estimates 25% of the time, indicating considerable volatility in the company's earnings performance.
- Expectation Adjustment Dynamics: In the last three months, EPS estimates have seen five upward revisions and two downward revisions, while revenue estimates have experienced two upward revisions and one downward revision, reflecting market uncertainty regarding the company's future performance.
- Market Response and Investment Dynamics: J.P. Morgan upgraded ratings for Suncor and Chevron while downgrading ConocoPhillips and Cenovus, indicating increased market confidence in Suncor, which also announced a $1 billion medium-term note offering to enhance financial flexibility.
See More
Momentum Warning for Energy Stocks: VAALCO and Suncor
- VAALCO Energy Analysis: On January 16, Freedom Capital Markets analyst Sergey Pigarev initiated coverage on VAALCO Energy with a Buy rating and a price target of $7.3, as the stock surged approximately 42% over the past month, currently showing an RSI of 89.4, indicating overbought conditions that may lead to a price correction, urging caution among investors.
- Suncor Energy Rating Upgrade: On January 23, Goldman Sachs analyst Neil Mehta maintained a Buy rating on Suncor Energy and raised the price target from $48 to $54, with the stock gaining around 21% in the past month and an RSI of 81.7, suggesting it is also in overbought territory, prompting investors to watch for potential price fluctuations.
- Market Momentum Indicators: The RSI serves as a momentum indicator that compares a stock's strength on up days versus down days; the elevated RSI values for both VAALCO and Suncor signal potential short-term pullback risks, which investors should factor into their trading decisions.
- Investor Caution: With both stocks exhibiting overbought momentum indicators, investors should remain vigilant in pursuit of short-term gains to avoid losses due to market volatility, particularly in the context of increasing fluctuations within the energy sector.
See More
S&P 500 Rises as Trump Withdraws Tariff Threats Against Europe
- Earnings Season Kickoff: The S&P 500 closed higher on Friday, marking the start of a new earnings season, with investor expectations for corporate profits boosting market sentiment.
- Analyst Rating Changes: J.P. Morgan upgraded Chevron (CVX) to Overweight with a $176 price target, citing the company's favorable position following the Hess merger and potential annual savings of $3B-$4B by 2026.
- Netflix Quarterly Report Reaction: Although Netflix's (NFLX) quarterly results were deemed “mixed and underwhelming,” analysts believe its long-term growth potential remains strong, viewing the current stock weakness as a buying opportunity for investors.
- Applied Materials Rating Upgrade: Deutsche Bank upgraded Applied Materials (AMAT) from Neutral to Buy with a $390 price target, reflecting a more favorable semiconductor equipment market environment entering 2026 and 2027, which is expected to drive higher DRAM equipment spending.
See More
