Raymond James has again flagged Sunoco (NYSE:SUN) and SunocoCorp (NYSE:SUNC) as leading investment ideas within its coverage universe, emphasizing re-rate potential for these names in the U.S. midstream sector. Sunoco shares are trading at $57.63, sitting roughly 0.96% under their 52-week high of $59.88, with a market capitalization of $10.84 billion and a price-to-earnings ratio of 19.75.
The brokerage expects both companies to deliver a solid fourth quarter 2025 earnings report as contributions from the recently closed Parkland deal begin to flow into results. Raymond James projects adjusted EBITDA of about $680 million for the quarter, which is consistent with consensus estimates in the $680 million to $690 million range. Sunoco has scheduled its earnings release for February 17, which the firm notes is 21 days away.
Analyst coverage reflected in InvestingPro data shows a strong buy consensus on Sunoco, with price targets among analysts ranging from $57 to $70. Raymond James highlights the Parkland acquisition as a meaningful contributor to near-term results, estimating roughly $200 million of contribution in the quarter, representing about two months of Parkland-related earnings. That contribution level represents a seasonal decline when compared with an approximately $334 million run-rate cited for the third quarter of 2025.
Sunoco’s last twelve months EBITDA is reported at $1.72 billion by InvestingPro, with the broker suggesting the Parkland acquisition has the potential to lift that figure further as integration progresses. Within Sunoco’s legacy operations, Raymond James expects mixed segment performance driven by seasonal patterns: Fuel Distribution is likely to see a modest decline in volumes seasonally, though margins could remain supported by a favorable commodity price environment; Pipelines should show quarter-over-quarter seasonal strength; and Terminals are projected to experience a typical seasonal slowdown.
The firm also points to certain margin pressures in Sunoco’s operating profile. InvestingPro Tips note weak gross profit margins in parts of the business, even as the company continues to offer a substantial dividend yield of 6.39% and has maintained dividend payments for 14 consecutive years. Raymond James notes Sunoco’s relatively low price volatility, captured in a beta of 0.5, which can appeal to income-oriented investors seeking stability.
Beyond fourth-quarter expectations, Raymond James underscores that forward guidance from the company will likely play a larger role in shaping investor sentiment going forward. The reaffirmation follows earlier upgrades made by the firm at the beginning of 2026 and comes after Sunoco published its 2026 guidance earlier in the year.
In a separate action, Raymond James upgraded Sunoco’s rating from Outperform to Strong Buy while maintaining a $70 price target. The upgrade cited progress on integrating newly acquired assets, including Parkland, and referenced the anticipated acquisition of TanQuid as additional strategic moves that could enhance operational capabilities. The analyst firm framed the rating change as a vote of confidence in Sunoco’s current trajectory.
No other recent earnings or revenue announcements for Sunoco have been noted in the data sources cited. Investors assessing the company’s near-term prospects should weigh the firm’s expectations for Parkland’s partial-quarter contribution, seasonal segment dynamics, and the importance of upcoming forward guidance when forming views on valuation and risk.
Summary
Raymond James retains Sunoco and SunocoCorp as top ideas in its midstream coverage, projecting adjusted EBITDA near $680 million for fourth quarter 2025, highlighting a roughly $200 million Parkland contribution for the quarter, and keeping a $70 price target alongside a Strong Buy rating.
Key points
- Raymond James forecasts adjusted EBITDA of approximately $680 million for Q4 2025, matching consensus at $680-690 million.
- Parkland acquisition is expected to contribute nearly $200 million for the quarter, roughly two months of results, down from a $334 million run-rate in Q3 2025.
- Sunoco offers a 6.39% dividend yield, has paid dividends for 14 consecutive years, and trades with a beta of 0.5, signaling low relative volatility.
Risks and uncertainties
- Forward guidance from Sunoco will likely be a major determinant of investor sentiment, making future communications a key uncertainty.
- Seasonal volume declines in Fuel Distribution and Terminals could weigh on segment performance despite favorable margins.
- Weak gross profit margins noted in InvestingPro Tips point to margin pressure in parts of the business that could affect overall profitability.