Loading...
Symbols:
Authors:

Suncor Energy Earnings Preview

by: FP Trading Desk July 24, 2008 | about stocks: SU    

FP Trading Desk

About this author:
Become a Contributor Submit an Article
  • Font Size:
  • Print

While Suncor (SU) is building a sulphur plant to manage emissions for the long term at an estimated cost of C$340-million, which was 15% complete at the end of the first quarter, it will also provide additional capacity for future expansions at Firebag, RBC Capital Markets analyst Gordon Gee told clients.

Late in the third quarter or early in the fourth, he expects volumes there will rise by roughly 5,000 barrels per day each month until full capacity of 90,000 is achieved in the second half of 2009.

Suncor reports second quarter results today, and RBC forecasts earnings per share of C$0.80, which are in line with consensus.

The firm rates the shares at “outperform” with a C$75 price target, which implies upside of approximately 35%. Mr. Gee said the stock appears to be discounting long-term oil prices in the high $80 range.

He told clients:

Despite operational issues experienced during 1H08 and recent share underperformance we believe current prices offer an attractive entry point for investors.

The analyst added that investors are essentially getting a free call option on future expansion at Voyageur oil sands project and elsewhere right now.

Related Articles
More by FP Trading Desk
Investment Resources
Money Managment
Research
Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
Earnings
Canada
Exploration & Production
Alternative Energy