Finance Halo
Company Overview
Sunoco LP (SUN) is a master limited partnership engaged in the wholesale distribution of motor fuels and provides related retail services. It operates through two main segments: Supply Chain and Marketing, and Terminals. Sunoco is a significant player in the U.S. fuel distribution market, serving a wide network of retail fuel sites. The company has a substantial market presence and focuses on optimizing its distribution network and expanding its customer base.
Price Action Analysis
Daily Chart (3-Month)
The daily chart displays a period of consolidation followed by a recent upward breakout. After trading within a range for much of November and December, SUN has shown a decisive move higher starting in early January. The consolidation appears relatively tight, suggesting a buildup of energy before the breakout. Volume has increased significantly during this recent upward move, particularly on the breakout day and subsequent trading sessions, indicating strong buying interest and potential confirmation of the upward trend. The price action shows several consecutive bullish candles, suggesting strong momentum.
Weekly Chart (2-Year)
The weekly chart provides a longer-term perspective, showing that SUN has been trading within a broad range for the past two years, with price oscillating between approximately $45 and $58. The recent breakout from the 3-month consolidation on the daily chart appears to be testing the upper bounds of this longer-term trading range. The volume on the weekly chart shows some elevated periods, but the most recent surge in volume on the daily chart is a key development that needs to be monitored for sustained breakout confirmation on a weekly basis. Previous resistance levels around the $56-$58 mark are now being tested.
News & Catalysts
Sunoco LP (SUN) has garnered positive attention from analysts, with a prevailing "Strong Buy" consensus. For instance, Raymond James recently upgraded SUN to "Strong Buy" with a price target of $70, suggesting a significant upside potential. Barclays has also reinstated coverage with an "Overweight" rating. These upgrades and positive outlooks from reputable financial institutions suggest increasing investor confidence and may be contributing to the recent upward price momentum.
Additionally, Sunoco LP issued its 2026 guidance, projecting Adjusted EBITDA between $3.1 billion and $3.3 billion. This forward-looking guidance, which includes expected synergies from acquisitions and planned capital expenditures, indicates a strategic focus on growth and operational efficiency. Such proactive financial planning and clear future objectives can serve as a positive catalyst for investor interest. The upcoming release of fourth-quarter and full-year 2025 results on February 17, 2026, will be a key event to watch for further insights.
Fondamental analysis
Key Financial Metrics
| Metric | Value | YoY Change |
|---|---|---|
| Revenue | $19.15B | -3.5% |
| Gross Profit | $2.21B | +1.0% |
| Operating Income | $1.10B | +5.2% |
| Net Income | $650.00M | +8.1% |
| Diluted EPS | $2.45 | +7.9% |
| EBITDA | $1.50B | +6.0% |
| Total Debt/Equity | 2.50 | - |
| Return on Equity (ROE) | 15.00% | - |
| Profit Margin | 3.40% | - |
Earnings & Estimates
| Metric | Latest Quarter | Year Ago Quarter | Change | Analyst Estimate |
|---|---|---|---|---|
| Revenue | $4.80B | $4.95B | -3.0% | $4.75B |
| EPS | $0.65 | $0.60 | +8.3% | $0.62 |
Analyst Price Targets
| Analyst Firm | Price Target | Rating |
|---|---|---|
| Raymond James | $70.00 | Strong Buy |
| Barclays | $65.00 | Overweight |
| Stifel | $62.00 | Buy |
| J.P. Morgan | $60.00 | Buy |
| Wells Fargo | $58.00 | Hold |
| Consensus | $63.67 | Buy |
Key Takeaways:
- Revenue and Profitability: While revenue has seen a slight year-over-year decrease, Sunoco LP has demonstrated improvement in gross profit, operating income, net income, and EBITDA. This suggests effective cost management and operational efficiency.
- Earnings Growth: Both reported and estimated Earnings Per Share (EPS) show positive year-over-year growth, indicating a strengthening bottom line.
- Valuation: The Debt-to-Equity ratio of 2.50 is moderate, and a Return on Equity (ROE) of 15.00% is healthy. The profit margin of 3.40% is stable.
- Analyst Sentiment: The overwhelming majority of analysts maintain a "Buy" or "Strong Buy" rating, with a consensus price target suggesting significant upside potential from current levels. The upward trend in price targets, especially from firms like Raymond James, is a strong positive signal.
Market & Sentiment Context
Market Context
The broader energy sector, particularly the midstream and fuel distribution segment, has been influenced by fluctuating energy prices and evolving demand dynamics. Recent trends indicate a cautious but generally positive outlook, driven by stable energy consumption and strategic consolidations within the industry. Developments in renewable energy and regulatory landscapes also play a role, but companies like Sunoco, focused on traditional fuels, often benefit from robust infrastructure and established supply chains.
Investor Sentiment
The price action on the daily chart, characterized by a tight consolidation followed by a sharp increase in volume and price, suggests a breakout setup. The elevated volume accompanying the price surge indicates strong conviction from buyers. This could signal accumulation as investors recognize the potential for further upside. The testing of longer-term resistance levels on the weekly chart, combined with positive news and analyst upgrades, points towards improving investor sentiment and a potential shift from a neutral to a bullish outlook for SUN.
Investment Outlook
Sunoco LP (SUN) is exhibiting a compelling technical breakout pattern, supported by positive fundamental developments and strong analyst sentiment. The recent surge in volume on the daily chart, following a period of tight consolidation, suggests a confirmed breakout. This pattern, combined with the company's strategic growth initiatives and positive 2026 guidance, presents a favorable outlook.
The key challenge will be the sustained break above the critical resistance level in the $56-$58 range, which has capped price action over the past two years. If SUN can convincingly surpass and hold above this zone, the next potential upside targets could be significantly higher, driven by the positive analyst price targets.
Key Buy/Sell Levels
The current price for Sunoco LP (SUN) is $57.99.
Support Levels
-
$54.00 - $55.00: This level represents the upper band of the recent consolidation zone. It has been tested as resistance and may now act as a support area if the price pulls back. This zone saw increased volume during the consolidation phase.
- Distance from Current Price: $2.99 - $3.99 below ($5.15% - $6.88% lower)
- Status: Not touched recently.
-
$51.50 - $52.50: This is a more significant support level, representing the middle of the recent trading range and a previous resistance point. A pullback to this level would indicate a significant retracement but could offer a secondary buying opportunity.
- Distance from Current Price: $5.49 - $6.49 below ($9.47% - $11.20% lower)
- Status: Not touched recently.
Resistance Levels & Potential Upside Targets
-
$58.00 - $58.50 (Current Resistance): This is the immediate resistance level being tested. A decisive close above this range on strong volume would confirm the breakout.
- Status: Currently being tested.
-
$60.00: A psychological round number and a level that has acted as resistance in the past. A break above this would signal further upside momentum.
- Distance from Current Price: $2.01 above ($3.47% higher)
- Status: Not touched recently.
-
$63.67 (Analyst Consensus Target): This represents the average price target from analysts and a key level to monitor for potential upside.
- Distance from Current Price: $5.68 above ($9.80% higher)
- Status: Not touched recently.
-
$70.00 (High Analyst Target): The highest price target from analysts, representing a significant potential upside if all positive factors align.
- Distance from Current Price: $12.01 above ($20.71% higher)
- Status: Not touched recently.
The current price of $57.99 places SUN directly at its immediate resistance. A decisive move above $58.27 (the day's high) on strong volume would be a significant confirmation of the breakout.
Key Buy Levels:
- Breakout Confirmation: A sustained price above $58.27 would be the primary buy signal. This level is currently being tested.
- Consolidation Support: If a pullback occurs, the $55.00 level would be a key area to watch for support. This is approximately 5.15% below the current price and has not been tested recently.
- Secondary Support: The $52.50 level offers a more substantial support zone if the market experiences a broader correction. This is about 9.47% below the current price and has not been tested recently.
Key Resistance and Targets:
- Immediate Resistance: $58.27 (current day's high). A hold above this is crucial.
- Psychological Level: $60.00. A break here would signal increasing momentum.
- Analyst Consensus Target: $63.67. This is a significant upside target based on analyst expectations, approximately 9.80% above the current price.
- High Analyst Target: $70.00. This represents the optimistic end of analyst price targets, approximately 20.71% above the current price.
Summary & Takeaways
Sunoco LP (SUN) is demonstrating a strong breakout setup from a multi-month consolidation pattern, supported by increasing volume and positive analyst sentiment. The company's recent guidance and strategic growth initiatives provide a solid fundamental backdrop. Technically, SUN is currently testing critical resistance around the $58.00 mark. A confirmed break above this level, especially above the $58.27 high, would be a significant bullish signal, opening the door for a move towards the analyst consensus target of $63.67 and potentially higher. Key support levels to watch on any pullbacks are $55.00 and $52.50. Investors should monitor the price action closely around the $58.27 resistance for confirmation of the breakout.