More Is Needed
The analyst believes the company's wholesale volumes will rise to around 60 percent from 2017 through 2021 after the 7-Eleven agreement. While the divestiture addresses Sunoco's leverage pressure and does give management the ability to buy back some of its stock or hunt for an accretive acquisition, the actions taken so far is insufficient to warrant a bullish rating.
Sighinolfi emphasized that Sunoco's actions so far won't lead to the company achieve a target leverage of 4.5–4.75x and a 1.1x payout ratio. Nevertheless, the positive changes so far warrant a $29 price target, although as of Monday morning, the stock was trading above $30 per share. Related Links:
7-Eleven's $3.3 Billion Expansion In The U.S. Vetr Hits Sunoco With Another Downgrade ____________ Image Credit: By Mike Kalasnik from Fort Mill, USA - IMG_4662, CC BY-SA 2.0, via Wikimedia Commons© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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