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Barclays Maintains an 'Overweight' on Sunoco (SUN); Announces Early Idling of Marcus Hook

December 2, 2011 1:10 PM EST
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Price: $60.15 --0%

Rating Summary:
    5 Buy, 18 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 7 | Down: 3 | New: 1
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Barclays maintains an 'Overweight' on Sunoco (NYSE: SUN) price target of $46.00.

Barclays analyst says, "Yesterday (12/1/11) Sunoco announced it will begin the process of idling its 175 mbl/d (000's bl/d) Marcus Hook refinery on the Delaware River, citing continued weakness in East Coast refining margins. We think this announcement will have a neutral impact on the shares. On the one hand, the earlier than previously announced shutdown suggests the cash burn run rate has been worse than management's previous expectation. On the other hand, the market will probably welcome the earlier shutdown, which will stop the bleeding. However, it is interesting to note that the SUN announcement comes on the same day as Western Refining's announced sale of its shut-down Yorktown refinery and related assets for $220 million. Western's announcement reinforces our belief that SUN will be able to sell its NE refineries, although not likely at an attractive price."

"As a result of the announcement we adjust our 4Q11, 2011 and 2012 EPS to
breakeven, a loss of $0.05 and earnings of $1.60, respectively."

For an analyst ratings summary and ratings history on Sunoco click here. For more ratings news on Sunoco click here.

Shares of Sunoco closed at $38.80 yesterday.


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