UPDATE: Mizuho Securities Downgrades Sunoco (SUN) to Neutral
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Mizuho Securities analyst Gabriel Moreen downgraded Sunoco (NYSE: SUN) from Buy to Neutral with a price target of $33.00.
The analyst comments "We think the Street was more or less expecting margin compression in 4Q given recent commodity inflation that has spilled into 2021. In that context, 4Q's miss was understandable and does not diminish all of SUN's 2020 success (incremental cost savings, higher CPG floor, value proposition should motor fuel consumption enter secular decline). SUN's valuation has deservedly rerated relative to our coverage; however, we believe near-term upside could be limited given tighter commodity supply and in spite of demand tailwinds from the nationwide COVID-19 vaccine roll-out. We continue to acknowledge the merits of SUN's fungible model and peer-leading fuel distribution position, but believe the bulk of SUN's re-rating has been achieved. Downgrade to Neutral."
Shares of Sunoco closed at $30.58 yesterday.
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