Suncor Energy Inc
Suncor Energy Inc. (NYSE: SU) is a Canada-based integrated energy company. The Company's segments include Oil Sands, Exploration and Production (E&P), and Refining and Marketing.
Recent Financial and Business Updates:
- In terms of financial results, Suncor's adjusted operating earnings for the first quarter of 2023 were USD 1.809 billion (USD 1.36 per common share), showing a decrease from USD 2.755 billion (USD 1.92 per common share) in the previous year's quarter. Net earnings for the same period were USD 2.052 billion (USD 1.54 per common share), compared to USD 2.949 billion (USD 2.06 per common share) in the prior year quarter.
- Adjusted funds from operations were USD 3.002 billion (USD 2.26 per common share), down from USD 4.094 billion (USD 2.86 per common share) in the previous year's quarter. Cash flow provided by operating activities amounted to USD 1.039 billion (USD 0.78 per common share), as opposed to USD 3.072 billion (USD 2.14 per common share) in the prior year quarter.
- During the first quarter of 2023, Suncor returned approximately USD 1.6 billion of value to shareholders. This was achieved through share repurchases totaling USD 874 million and dividend payments amounting to USD 690 million.
- Suncor's Total Oil Sands production in the first quarter of 2023 reached 675,100 barrels per day (bbls/d), including record quarterly In Situ volumes. However, there was a slight decrease compared to the prior year quarter due to lower Synthetic Crude Oil (SCO) production.
- Several significant developments took place regarding Suncor's asset portfolio. Firstly, the company completed the sale of its wind and solar assets, generating gross proceeds of USD 730 million.
- Additionally, Suncor acquired an additional 14.65% working interest in Fort Hills for USD 712 million.
- Moreover, an agreement was reached for the sale of the U.K. Exploration and Production (E&P) portfolio, with gross proceeds amounting to approximately USD 1.2 billion, pending regulatory approval. This sale includes a contingent consideration of approximately USD 338 million, subject to closing adjustments and other closing costs.
- Furthermore, Suncor entered into an agreement to acquire TotalEnergies' Canadian operations, which encompass a 31.23% working interest in Fort Hills and a 50% working interest in the Surmont in situ asset.
- Rich Kruger assumed the position of Suncor's new President and Chief Executive Officer, effective April 3, 2023. Additionally, Mr. Kruger joined the Suncor Board of Directors, bringing his leadership to the company.
Technical Observation (on the daily chart)
The price of SU stock has shown a consistent downward trend since making its 52-week high on November 15, 2022, with a correction of approximately 20.45%. Currently, the stock is near an important support zone of USD 26.00-USD 28.00, from where price has taken support in the past. A breakout in upward direction from the range of USD 30.00-USD 32.00, would likely initiate a new short-term trend in the up direction with targets of USD 35.00-USD 46.00 levels. The RSI (14 period) momentum indicator is at a value of 34.61, with expectations of some consolidation or a short-term upward momentum from the double bottom levels. Moreover, the price is currently positioned below both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance levels.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Suncor Energy Inc. (NYSE: SU) at the current price of USD 29.67 as of July 13, 2023, at 08:25 am PDT.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is July 13, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
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