BMO Capital analyst Randy Ollenberger maintained a Hold rating on Suncor Energy (SU – Research Report) yesterday and set a price target of C$52.00.
Randy Ollenberger has given his Hold rating due to a combination of factors including Suncor Energy’s solid performance in the fourth quarter of 2023 and the potential for further improvements in cost structure and production reliability. Although the company has made strides under its new management team, particularly in integrating its oil sands assets and focusing on lowering operating costs, Ollenberger believes that Suncor still has significant work to do. This includes achieving a corporate breakeven price reduction and reducing debt to a level that would enable increased shareholder distributions.
Furthermore, while Suncor’s recent operational improvements are noteworthy, Ollenberger points out that the company has not yet attained the same level of operational reliability as its industry peers. He also highlights that Suncor is unlikely to reach its interim net debt target until early 2025, which is later than its peers who are projected to transition to a 100% payout ratio this year. These factors, combined with the need for the company to consistently demonstrate operational excellence to regain investor confidence, contribute to the Market Perform rating and a cautious outlook despite recent progress.
According to TipRanks, Ollenberger is a 5-star analyst with an average return of 11.6% and a 56.15% success rate. Ollenberger covers the Energy sector, focusing on stocks such as Birchcliff Energy, Cenovus Energy, and Suncor Energy.
In another report released yesterday, Scotiabank also maintained a Hold rating on the stock with a C$46.00 price target.
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Suncor Energy (SU) Company Description:
Suncor 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.
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