Oppenheimer Reiterates Perform Rating on Sunoco (SUN)

Oppenheimer is out with an analyst note this morning, where they reiterate their Perform rating on shares of Sunoco Inc. SUN; they did not provide a price target. Oppenheimer cited an analysts meeting they had with company management to “update investors on the company's strategic focus going forward and outlined a concise plan to deliver shareholder value.” The company said it will separate its SunCoke Energy segment in 1H 2011 and may spin it to shareholders in a tax-free transaction. Oppenheimer said that, “SUN will focus its remaining operations on the 4,700 retail locations that are supplied by SUN's crude refineries. We reiterate our Perform rating on SUN shares, as we don't think their upside potential is sufficiently greater than the downside risk from continued weak refining margins and volatile marketing margins. We are increasing 2010 and 2011 EPS estimates to account for updated company guidance and benchmark indicators.” Oppenheimer analysts closed by saying, “SUN shares have gained 31% YTD, significantly outperforming the 11% peer average return and the flat return for the S&P 500. SUN is currently trading 1% below its 12-month high and 60% above the low, versus 15% and 37% for peers and 9% and 28% for the S&P 500.” 4 Strong Buys here for free.