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Suncor Energy About To Go Harvest Mode, Morgan Stanley Upgrades

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Morgan Stanley analyst Benny Wong upgraded Suncor Energy Inc. (NYSE: SU) from Equal-Weight to Overweight.

The key reason for the upgrade is Suncor’s de-emphasis on acquisitions, allowing the company and analysts to focus on existing projects rather than speculation.

“Without the distraction of transaction speculation, we can focus on Suncor's re-rate potential and anticipate outperformance,” said Wong. The analyst sees the outperformance being driven by three main factors:

  1. Excitement leading up to the completion of Suncor’s Fort Hills Project.
  2. Free Cash flow reversal and inflection.
  3. Growth and net-asset-value that may be revealed through operational synergies and optimizations.

Wong also identified key risks in a negative OPEC announcement on November 30, cost inflation in their Fort Hills project and more deterioration of the environment downstream.

Latest Ratings for SU

DateFirmActionFromTo
May 2018Morgan StanleyMaintainsOverweightOverweight
Apr 2018Morgan StanleyMaintainsOverweightOverweight
Apr 2018Bank of AmericaReinstatesBuyBuy

View More Analyst Ratings for SU
View the Latest Analyst Ratings

Posted-In: Benny Wong Morgan StanleyAnalyst Color Downgrades Analyst Ratings

 

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