Suncor Energy (SU) Stock Gains Today as Oil Prices Rebound Slightly

NEW YORK (TheStreet) --Shares of Suncor Energy (SU) were gaining 7.4% to $28.90 day after oil prices started to rebound from multiyear lows.

WTI crude oil for January delivery was gaining 0.7% to $56.30 a barrel Tuesday afternoon after hitting a five and a half year low of $53.60 a barrel earlier in the day, according to MarketWatch.

"We are starting to see a bottom here, and we are getting some value buying" oil consultant Carl Larry from Frost & Sullivan told the publication.

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The oil producer, and others in the energy sector, is also seeing a boost from Repsol's (REPYY) announcement that it will acquire Talisman Energy (TLM) for $6.3 billion.

TheStreet Ratings team rates SUNCOR ENERGY INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUNCOR ENERGY INC (SU) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SU's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.05, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has increased to $2,905.00 million or 15.27% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -1.58%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.3%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • SUNCOR ENERGY INC's earnings per share declined by 45.1% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, SUNCOR ENERGY INC increased its bottom line by earning $2.59 versus $1.74 in the prior year.
  • You can view the full analysis from the report here: SU Ratings Report

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