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Suncor Energy (SU) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, Suncor Energy (SU) closed at $28.23, marking a +1.29% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.08%. At the same time, the Dow lost 0.56%, and the tech-heavy Nasdaq lost 4.81%.

Prior to today's trading, shares of the energy company had gained 21.79% over the past month. This has outpaced the Oils-Energy sector's gain of 13.24% and the S&P 500's gain of 0.64% in that time.

Suncor Energy will be looking to display strength as it nears its next earnings release, which is expected to be February 2, 2022. On that day, Suncor Energy is projected to report earnings of $0.81 per share, which would represent year-over-year growth of 1257.14%. Meanwhile, our latest consensus estimate is calling for revenue of $9.31 billion, up 83.9% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for Suncor Energy. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.95% lower within the past month. Suncor Energy is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Suncor Energy is holding a Forward P/E ratio of 8.72. This represents a discount compared to its industry's average Forward P/E of 9.48.

Also, we should mention that SU has a PEG ratio of 0.8. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Integrated - Canadian was holding an average PEG ratio of 0.6 at yesterday's closing price.

The Oil and Gas - Integrated - Canadian industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 109, putting it in the top 43% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SU in the coming trading sessions, be sure to utilize Zacks.com.


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