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Investing.com - Raymond James has initiated coverage on SunocoCorp LLC (OTC:SUNC) with an Outperform rating and a price target of $70.00, representing a potential 43% upside from the current price of $48.98. InvestingPro data shows the stock is trading near its 52-week high of $51.95.
The investment firm cites SUNC as "an interesting and compelling equity opportunity," highlighting the company’s large, diversified asset base and strong operational execution. SunocoCorp is the new C-Corp security created following the completion of Sunoco’s acquisition of Parkland. With a market capitalization of $2.52 billion, SUNC generally trades with low price volatility according to InvestingPro data.
Raymond James points to sustained profitability momentum and meaningful upside potential from medium-term optimization and integration initiatives as key factors supporting its positive outlook. The firm also notes SUNC’s disciplined capital allocation and cost control measures. Analysts forecast earnings per share of $2.80 for fiscal year 2025, though InvestingPro tips reveal the company suffers from weak gross profit margins.
These strategic elements are expected to drive robust free cash flow generation, which should enable ongoing de-leveraging and enhanced financial flexibility for the company, according to the research note. This aligns with SunocoCorp’s current levered free cash flow of $238 million over the last twelve months.
Despite acknowledging a volatile macro environment, Raymond James anticipates solid volume trends through 2026 and beyond for SunocoCorp, supported by resilient fuel margins, strong synergy capture from acquisitions, and an increasingly diversified business model. The company currently trades at an EV/EBITDA ratio of 9.42x with a return on assets of 3.02%.
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