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Suncor (SU) to Retain Its Petro-Canada Retail Fuel Business

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Suncor Energy (SU - Free Report) recently declared that it would retain its Petro-Canada gas station retail business after concluding a review it launched earlier this year under pressure from the activist investor, Elliott Investment Management.

In July 2022, Calgary-based Suncor first announced that it would explore the sale of its gas station business after reaching an agreement with Elliott, which publicly called for an overhaul at the company citing underperforming shares, operational challenges and safety concerns. Elliott wanted SU to look for opportunities beyond its core oilsands business, along with the possible sale of its Petro-Canada 1,800-location retail network.

However, Suncor shunned the possibility of the sale by stating that it has decided to retain, improve and optimize the Petro-Canada retail business after a comprehensive review. The company intends to augment its EBITDA contribution and strengthen its integrated refining & marketing business.

Further, SU stated that it would concentrate on improving the retail fuel business by expanding collaborations with non-fuel ventures like quick-service restaurants and convenience stores. Suncor also came out with its 2023 production outlook and capital guidance, where a C$5.6-billion capital spending program for 2023 and a mid-point production target of 755,000 barrels per day were announced.

Founded in 1917, Suncor Energy, Inc. is Canada's premier integrated energy company. Its operations include oil sands development and upgrading, conventional and offshore crude oil and gas production, petroleum refining and product marketing.

SU is one of the largest owners of oil sands worldwide. The company gained new oil sands properties to supplement its existing operations in northern Alberta, making it the dominant producer in the region, where reserves are second only to Saudi Arabia.

Suncor currently has a Zacks Rank #3 (Hold). Investors interested in the energy space might look at some better-ranked stocks — Patterson-UTI (PTEN - Free Report) , NexTier Oilfield Solutions (NEX - Free Report) and Par Pacific (PARR - Free Report) — each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Patterson’s 2022 earnings is pegged at 54 cents per share, which implies an increase of about 128% from the year-ago loss of $1.93.

PTEN beat estimates for earnings in three of the trailing four quarters, the average being around 169.2%.

The consensus mark for NexTier’s 2022 earnings stands at $1.41 per share, indicating an increase of about 427.9% from the year-ago loss of 43 cents.

NEX beat estimates for earnings in all the trailing four quarters, the average being around 271%.

The Zacks Consensus Estimate for Par Pacific’s 2022 earnings stands at $7.84 per share, which indicates an increase of about 555.8% from the year-ago loss of $1.72.

The consensus mark for PARR’s 2022 earnings has been revised upward two times over the past 60 days from $4.90 to $7.84 per share.

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