SUN heads into mid-May with analysts and short sellers pulling in opposite directions — and right now the bulls are winning.
The most striking development this week is the wall of upward target-price revisions following Sunoco's Q1 print. Every analyst who updated their model in the past two weeks raised their target. RBC Capital lifted to $78 this morning, maintaining Outperform. Citigroup moved to $73 from $65 last Friday. Wells Fargo raised to $77 from $71 earlier in the week. The direction of travel is unambiguous: the Street read Q1 as a beat, and the consensus mean target now sits at $72.88 — a tight premium to the current $69.30, but one built on models that are still being revised upward. The EPS surprise factor score ranks in the 98th percentile of the universe, meaning almost no company has been beating estimates more consistently.
The short-side story backs this up. Bears have been covering aggressively. Short interest has fallen roughly 13% over the past week to around 1.7% of the free float — a level that makes this a lightly shorted name by any measure. The retreat has been going on for a month; shorts are down nearly 18% over 30 days. Borrow costs have eased in parallel, dropping from above 5% in early April to 2.78% now — the cheapest the borrow has been in weeks. Availability is ample, with utilization well below the 52-week high of 100%, suggesting there is no squeeze dynamic at play. The ORTEX short score has also retreated sharply — from 63.3 on May 8 to 56.5 today — reflecting the unwind in bearish positioning.
Options lean mildly more cautious than usual, but not dramatically so. The put/call ratio of 0.55 runs modestly above its 20-day average of 0.48, translating to a z-score of roughly 1.4 — elevated but not at an extreme. Given the stock is up 4.2% on the day and 6.5% over the past month, some hedging activity after a sharp run is unsurprising. The 52-week PCR range stretches all the way to 4.12 on the high end, putting today's reading well inside normal territory.
The ownership picture is dominated by Energy Transfer LP with a near 21% stake, a structural anchor that is unlikely to move. ALPS Advisors holds another 18%, primarily through MLP-focused products. More interesting at the margin is Mirae Asset adding 111,000 shares and FMR (Fidelity) building a position of over 1.48 million shares in its most recent filing — a sign that generalist institutional interest in the partnership has been growing. The institutional holder count of 115 is modest for a company of this size, reflecting SUN's MLP structure and its more specialist investor base.
Valuation remains undemanding. The EV/EBITDA of around 5x to 7x — depending on the estimate vintage — is at the lower end of midstream peers, which goes some way toward explaining why analysts keep nudging targets higher even as the stock rallies. The dividend score ranks in the 90th percentile, underlining the income appeal that makes MLP investors sticky holders.
The next earnings date is August 5. With the post-Q1 re-rating now largely digested and the short base at multi-month lows, the setup heading into summer will hinge on fuel margins, volume throughput, and whether the Street's newly revised targets leave enough room for further upside.
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