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1. Company Snapshot

1.a. Company Description

Sunoco LP, together with its subsidiaries, distributes and retails motor fuels in the United States.It operates in two segments, Fuel Distribution and Marketing, and All Other.The Fuel Distribution and Marketing segment purchases motor fuel from independent refiners and oil companies and supplies it to independently operated dealer stations, distributors and other consumer of motor fuel, and partnership operated stations, as well as to commission agent locations.


The All Other segment operates retail stores that offer motor fuel, merchandise, foodservice, and other services that include credit card processing, car washes, lottery, automated teller machines, money orders, prepaid phone cards, and wireless services.It also leases and subleases real estate properties; and operates terminal facilities on the Hawaiian Islands.As of December 31, 2021, the company operated 78 retail stores in Hawaii and New Jersey.


Sunoco GP LLC serves as the general partner of the company.The company was formerly known as Susser Petroleum Partners LP and changed its name to Sunoco LP in October 2014.Sunoco LP was founded in 1886 and is headquartered in Dallas, Texas.

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1.b. Last Insights on SUN

Sunoco LP's recent performance was driven by strong Q3 results, including net income of $137 million and Adjusted EBITDA of $496 million. The acquisition of Parkland Corporation and expected synergies have boosted growth prospects. A 1.25% increase in quarterly distribution and a strong trailing 12-month distribution coverage ratio of 1.8 times also contributed positively. Additionally, the company remains on track to complete the acquisition of TanQuid in Q4 2025. Analysts view SUN as a "buy" with a 7% yield and 5% annual distribution growth target.

1.c. Company Highlights

2. Sunoco's Q3 2025 Earnings: A Record-Breaking Quarter

Sunoco LP reported a record adjusted EBITDA of $496 million for the third quarter of 2025, surpassing the $470 million recorded in the same period last year. Distributable cash flow as adjusted came in at $326 million. The company's balance sheet remains strong, with a $1.5 billion revolving credit facility having no outstanding borrowings, and leverage at the end of the quarter was approximately 3.9x. Following the closing of the Parkland transaction, the credit facility was increased by $1 billion to $2.5 billion. Actual EPS came out at $0.64, missing estimates of $1.54.

Publication Date: Nov -14

📋 Highlights
  • Record Adjusted EBITDA: Q3 2025 adjusted EBITDA reached $496 million, up from $470 million in Q3 2024.
  • Distributable Cash Flow: Generated $326 million in distributable cash flow as adjusted, supported by strong operational performance.
  • Parkland Acquisition Synergies: Anticipates over $250 million in synergies from the Parkland acquisition, driven by expense and commercial efficiencies.
  • Leverage Position: Post-Parkland credit facility expanded to $2.5 billion, with leverage at 3.9x, targeting a return to 4x within 12 months.
  • Free Cash Flow Outlook: Expects free cash flow to exceed $1 billion annually in the near term following the Parkland integration.

Segment Performance

The company's fuel distribution segment delivered adjusted EBITDA of $238 million, excluding $6 million of transaction-related expenses. Volumes came in at 2.3 billion gallons during the quarter, up 5% from the previous quarter and up 7% compared to the third quarter of last year. The Pipeline Systems segment reported adjusted EBITDA of $182 million, while the Terminals segment delivered adjusted EBITDA of $76 million. As Joseph Kim mentioned, "Our field distribution business continues to grow and provide stable earnings."

Acquisition and Synergies

The acquisition of Parkland Corporation is expected to bring more than $250 million in synergies, with a focus on expense and commercial side benefits. The deal is highly attractive, with a greater than 10% accretion. Sunoco expects to be back to its long-term target leverage of 4x within 12 months. The company's strong asset base on the West Coast is well-positioned to take advantage of market shifts due to ongoing California refinery closures.

Valuation and Growth Prospects

With a P/E Ratio of 15.49 and an EV/EBITDA of 8.18, the market is pricing in a certain level of growth for Sunoco. Analysts estimate next year's revenue growth at 37.2%. The company's ROE stands at 10.1%, and ROIC is at 5.96%. The Net Debt / EBITDA ratio is 4.05, indicating a relatively high level of debt. However, with the expected increase in free cash flow to over $1 billion a year, Sunoco is well-positioned to deleverage and drive growth.

Outlook

Sunoco expects to finish the year strong in its midstream segments, driven by the stability of the underlying assets and the work done to optimize the expense structure. The company will provide guidance for 2026 early next year, based on Parkland's performance this year and synergies from the acquisition. With a Dividend Yield of 7.06%, Sunoco remains an attractive option for income investors.

3. NewsRoom

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Stardust Solar Sets 2026 Outlook Backed by $4M Backlog and Strengthening Financial Metrics

Dec -02

Source: newsfilecorp.com

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Stardust Solar Closes Second and Final Tranche of Private Placement of Units

Dec -01

Source: newsfilecorp.com

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Black Friday Sale for Income Investors: These Ultra-High-Yield Dividend Stocks Are Bargain Buys

Nov -28

Source: fool.com

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Stardust Solar Closes First Tranche of Private Placement of Units

Nov -13

Source: newsfilecorp.com

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Here are Tuesday's Top Wall Street Analyst Research Calls: Coreweave, Instacart, Qorvo, Robinhood Markets, Skyworks Solutions, Viasat and More

Nov -11

Source: 247wallst.com

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Sunoco LP (SUN) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates

Nov -07

Source: zacks.com

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OTC Markets Group Welcomes SUN SILVER LTD. to OTCQX

Nov -06

Source: globenewswire.com

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Sunoco: Solid Q3 With Parkland Benefits Set To Begin

Nov -06

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.80%)

6. Segments

Fuel Distribution and Marketing

Expected Growth: 15%

Sunoco LP's 15% growth in Fuel Distribution and Marketing is driven by increasing demand for gasoline and diesel, strategic acquisitions, and expansion of its convenience store network. Additionally, the company's focus on operational efficiency, cost savings, and investments in digital platforms have contributed to its growth momentum.

All Other

Expected Growth: 12%

All Other segment of Sunoco LP, with 12% growth, is driven by increasing demand for non-fuel services, expansion of convenience stores, and strategic acquisitions. Additionally, growth in merchandise sales, commission income, and fees from credit card transactions also contribute to the segment's growth.

Intercompany Eliminations

Expected Growth: 10%

Sunoco LP's 10% growth in Intercompany Eliminations is driven by increased fuel sales volume, higher wholesale fuel prices, and strategic acquisitions. Additionally, the company's focus on cost savings initiatives and optimization of its logistics and transportation network have contributed to the growth. Furthermore, Sunoco LP's ability to effectively manage its working capital and maintain a strong balance sheet has also supported its growth momentum.

7. Detailed Products

Fuel

Sunoco LP is a leading fuel distributor, providing a range of fuel products including gasoline, diesel, and alternative fuels to convenience stores, independent dealers, and commercial customers.

Lubricants

Sunoco LP offers a variety of lubricants, including motor oils, transmission fluids, and gear oils, designed to meet the needs of automotive, commercial, and industrial customers.

Convenience Store Services

Sunoco LP provides a range of services to convenience store owners, including fuel supply, equipment maintenance, and marketing support.

Commercial Fleet Fueling

Sunoco LP offers a commercial fleet fueling program, providing fuel management solutions to fleets of all sizes.

APlus Convenience Stores

Sunoco LP operates a chain of APlus convenience stores, offering a range of food, beverages, and merchandise to customers.

8. Sunoco LP's Porter Forces

Forces Ranking

Threat Of Substitutes

Sunoco LP's threat of substitutes is moderate due to the availability of alternative energy sources and transportation methods.

Bargaining Power Of Customers

Sunoco LP's customers have limited bargaining power due to the company's strong brand recognition and wide distribution network.

Bargaining Power Of Suppliers

Sunoco LP's suppliers have moderate bargaining power due to the company's dependence on a few large suppliers for crude oil and other raw materials.

Threat Of New Entrants

The threat of new entrants in the energy industry is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry in the energy industry is high due to the presence of several large and established players, leading to intense competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 78.20%
Debt Cost 5.84%
Equity Weight 21.80%
Equity Cost 10.37%
WACC 6.83%
Leverage 358.69%

11. Quality Control: Sunoco LP passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Alliance Resource Partners

A-Score: 7.4/10

Value: 8.6

Growth: 4.8

Quality: 7.1

Yield: 10.0

Momentum: 5.5

Volatility: 8.7

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Chord Energy

A-Score: 6.5/10

Value: 8.1

Growth: 8.1

Quality: 5.1

Yield: 10.0

Momentum: 1.5

Volatility: 6.0

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HF Sinclair

A-Score: 5.9/10

Value: 7.3

Growth: 4.1

Quality: 3.9

Yield: 7.0

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

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Sunoco

A-Score: 5.5/10

Value: 3.9

Growth: 4.0

Quality: 2.5

Yield: 10.0

Momentum: 3.5

Volatility: 9.0

1-Year Total Return ->

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PBF Energy

A-Score: 4.4/10

Value: 9.6

Growth: 1.8

Quality: 4.2

Yield: 5.0

Momentum: 3.5

Volatility: 2.3

1-Year Total Return ->

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Valvoline

A-Score: 4.0/10

Value: 2.9

Growth: 4.9

Quality: 5.8

Yield: 0.0

Momentum: 3.0

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

53.82$

Current Price

53.82$

Potential

-0.00%

Expected Cash-Flows