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Suncor (SU): Is a Beat in the Cards this Earnings Season?
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Canada’s biggest energy firm Suncor Energy Inc. (SU - Free Report) , will release fourth-quarter 2016 results after the market closes on Wednesday, Feb 8.
Last quarter, Suncor reported excellent results – a 300% positive surprise – due to strong upstream production, lower operating costs and record crude throughput. The company missed the Zacks Consensus Estimate in three out of the last four quarters but has an average positive earnings surprise of 40.55%.
Why a Likely Positive Surprise?
Our proven model shows that Suncor is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +9.52%. This is because the Most Accurate estimate stands at 23 cents, while the Zacks Consensus is pegged at 21 cents. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank: Suncor sports a Zacks Rank #1 (Strong Buy) which, when combined with a positive Earnings ESP, makes us confident about a positive earnings beat.
Please note that stocks with Zacks Ranks #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating on earnings.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
What is Driving the Better-Than-Expected Earnings?
Calgary, Alberta-based Suncor Energy, Inc. is Canada’s premier integrated energy company. With a large portfolio of growth opportunities, a unique asset base and high long-term return potential, the company has a competitive edge over its peers.
Following the Petro-Canada acquisition, Suncor has become one of the largest owners of oil sands in the world. The company has gained new oil sands properties that supplement its existing operations in northern Alberta. This has positioned the company as a dominant producer in the region as the reserves in this area are second only to Saudi Arabia. The oil sands assets of the ‘new’ Suncor promises years of production growth as prices improve from the recession-driven lows and conventional reserves become harder to find.
With two back-to-back transactions – acquisition of Canadian Oil Sands Ltd. and the Murphy Oil deal – Suncor has increased its stake in the massive Syncrude oil sands project to around 54%. It not only increased Suncor's daily oilsands production capacity by 17,500 barrels but also gave it more leverage to capitalize on the rebound in oil prices.
Additionally, management has not been shy of divesting assets, particularly those that do not fit into the company’s long-term growth plan. The recent decision to do away with its Petro-Canada lubricants business to Dallas-based HollyFrontier Corp. for $1.125 billion is another step in this direction. This will free up capital to be used for Suncor's longer-term high-grade prospects.
Stocks to Consider
Here are other energy firms you may want to consider on the basis of our model, which shows that these have the right combination of elements to post an earnings beat this quarter:
Sprague Resources LP has an Earnings ESP of +3.64% and a Zacks Rank #2. The partnership is anticipated to release fourth-quarter earnings on Mar 9.
Pioneer Natural Resources Company (PXD - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2. The company is likely to release fourth-quarter earnings on Feb 7.
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Suncor (SU): Is a Beat in the Cards this Earnings Season?
Canada’s biggest energy firm Suncor Energy Inc. (SU - Free Report) , will release fourth-quarter 2016 results after the market closes on Wednesday, Feb 8.
Last quarter, Suncor reported excellent results – a 300% positive surprise – due to strong upstream production, lower operating costs and record crude throughput. The company missed the Zacks Consensus Estimate in three out of the last four quarters but has an average positive earnings surprise of 40.55%.
Why a Likely Positive Surprise?
Our proven model shows that Suncor is likely to beat earnings because it has the right combination of two key ingredients.
Positive Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +9.52%. This is because the Most Accurate estimate stands at 23 cents, while the Zacks Consensus is pegged at 21 cents. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.
Zacks Rank: Suncor sports a Zacks Rank #1 (Strong Buy) which, when combined with a positive Earnings ESP, makes us confident about a positive earnings beat.
Please note that stocks with Zacks Ranks #1, 2 (Buy) or 3 (Hold) have a significantly higher chance of beating on earnings.
Conversely, the Sell-rated stocks (#4 or 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
What is Driving the Better-Than-Expected Earnings?
Calgary, Alberta-based Suncor Energy, Inc. is Canada’s premier integrated energy company. With a large portfolio of growth opportunities, a unique asset base and high long-term return potential, the company has a competitive edge over its peers.
Following the Petro-Canada acquisition, Suncor has become one of the largest owners of oil sands in the world. The company has gained new oil sands properties that supplement its existing operations in northern Alberta. This has positioned the company as a dominant producer in the region as the reserves in this area are second only to Saudi Arabia. The oil sands assets of the ‘new’ Suncor promises years of production growth as prices improve from the recession-driven lows and conventional reserves become harder to find.
Suncor Energy Inc. Price and EPS Surprise
Suncor Energy Inc. Price and EPS Surprise | Suncor Energy Inc. Quote
With two back-to-back transactions – acquisition of Canadian Oil Sands Ltd. and the Murphy Oil deal – Suncor has increased its stake in the massive Syncrude oil sands project to around 54%. It not only increased Suncor's daily oilsands production capacity by 17,500 barrels but also gave it more leverage to capitalize on the rebound in oil prices.
Additionally, management has not been shy of divesting assets, particularly those that do not fit into the company’s long-term growth plan. The recent decision to do away with its Petro-Canada lubricants business to Dallas-based HollyFrontier Corp. for $1.125 billion is another step in this direction. This will free up capital to be used for Suncor's longer-term high-grade prospects.
Stocks to Consider
Here are other energy firms you may want to consider on the basis of our model, which shows that these have the right combination of elements to post an earnings beat this quarter:
W&T Offshore, Inc. (WTI - Free Report) is expected to release fourth-quarter earnings results on Mar 14. The company has an Earnings ESP of +73.91% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sprague Resources LP has an Earnings ESP of +3.64% and a Zacks Rank #2. The partnership is anticipated to release fourth-quarter earnings on Mar 9.
Pioneer Natural Resources Company (PXD - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2. The company is likely to release fourth-quarter earnings on Feb 7.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>