Sunoco LP (SUN) Up 3.6% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Sunoco LP (SUN). Shares have added about 3.6% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Sunoco LP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Sunoco Q3 Earnings & Revenues Miss EstimatesSunoco LP reported a third-quarter 2024 loss of 26 cents per unit, which missed the Zacks Consensus Estimate for earnings of $1.53 per unit. The reported figure also declined from the year-ago quarter’s earnings of $2.95 per unit.  Total quarterly revenues of $5.75 billion missed the Zacks Consensus Estimate of $5.97 billion. The top line also decreased from $6.32 billion reported in the year-ago quarter.Weak quarterly results can be attributed to increased operating costs and higher general and administrative expenses.Segmental PerformanceSunoco reports financial results from the second quarter under three reportable segments — Fuel Distribution, Pipeline Systems and Terminals.Fuel Distribution: Adjusted EBITDA in the segment increased to $253 million from $234 million in the comparable period of 2023. The segment benefited from higher motor fuel sales and improved fuel margin per gallon compared to the previous year.Pipeline Systems: The unit reported adjusted EBITDA of $136 million compared with $2 million in the prior-year quarter. This figure included one-time transaction-related expenses worth $11 million. The increase was primarily driven by the acquisition of NuStar.Terminals: The segment reported adjusted EBITDA of $67 million, up from $21 million reported in the corresponding period of 2023. The rise was primarily due to the recent acquisitions of NuStar, Zenith European and Zenith Energy terminals across the East Coast and Midwest.In terms of volume, the partnership sold 2.1 billion gallons of fuel in the reported quarter, up 1% from the prior-year quarter’s level. The figure also beat our estimate of 2 billion gallons.Motor fuel gross profit per gallon was 12.8 cents compared with the year-ago level of 12.5 cents.Sunoco reported a total operating income of $107 million, which decreased from $338 million in the prior-year quarter.For the quarter ended Sept. 30, 2024, the net income was $2 million compared with $272 million in the third quarter of 2023.Distributable Cash FlowThe adjusted distributable cash flow totaled $349 million, up from the year-ago level of $181 million.Expenses & Capital ExpenditureThe total cost of sales and operating expenses amounted to $5.64 billion, down from $5.98 billion a year ago.The partnership incurred a capital expenditure of $93 million, comprising $67 million in growth capital and $26 million in maintenance capital.Balance SheetAs of Sept. 30, 2024, Sunoco had cash and cash equivalents of $116 million and a net long-term debt of $7.26 billion.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed an upward trend in estimates revision.VGM ScoresAt this time, Sunoco LP has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Sunoco LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerSunoco LP belongs to the Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships industry. Another stock from the same industry, Targa Resources, Inc. (TRGP), has gained 5.6% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.Targa Resources reported revenues of $3.85 billion in the last reported quarter, representing a year-over-year change of -1.2%. EPS of $1.75 for the same period compares with $0.97 a year ago.Targa Resources is expected to post earnings of $1.89 per share for the current quarter, representing a year-over-year change of +53.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.7%.Targa Resources has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sunoco LP (SUN): Free Stock Analysis Report Targa Resources, Inc. (TRGP): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks