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Sunoco LP (SUN) was upgraded to “Buy” following a recent sell-off, with the article citing an attractive entry point for income-focused investors. Recent results showed robust EBITDA growth driven by the Parkland acquisition and elevated crack spreads, with excess profits expected to persist through 2027. SUN carries 3.5x leverage, ample distribution coverage, and a 6.3% yield targeted to grow 5% annually.
Sunoco LP Upgraded to “Buy” After Sell-Off, Citing Long-Term Distribution Growth
Sunoco LP (SUN) has been upgraded to “Buy” following a recent sell-off, according to a Seeking Alpha article published Thursday. The upgrade argues the pullback presents an attractive entry point for income-focused investors.
Recent Results and Drivers
The article points to recent results showing robust EBITDA growth. It attributes that growth to two factors:
- The Parkland acquisition
- Elevated crack spreads
The article also states that excess profits are likely to persist through 2027.
Balance Sheet and Distribution
According to the article, Sunoco maintains a strong balance sheet, with:
- Leverage of 3.5x
- Ample distribution coverage
- A 6.3% yield targeted to grow 5% annually
Rating Change
The upgrade to “Buy” follows the recent sell-off in the units. The article frames the current level as an attractive entry for income-focused investors, citing the distribution growth target as a central part of the case.