Suncor Energy (NYSE:SU) shares have advanced from $10.6 above $15.8 in less than several weeks and the current price stands around $15.2. This stock is still attractively valued but maybe now is not the best moment for investing in Suncor Energy.
Fundamental analysis: Suncor Energy reported a 35% Y/Y decrease in revenues in Q3
The price of crude oil has continued to trade above the $40 level and the price of Suncor Energy stock is also supported by this. From the beginning of November, Suncor Energy shares have advanced from $11.45 above $15.8 and the current price stands around $15.2.
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The oil price has advanced on the announcement that Pfizer’s coronavirus vaccine was 90% effective but there is still no clear trend for oil prices. Analysts also expect that OPEC would maintain lower production next year to support prices but this is still not secure.
Suncor Energy primarily focuses on developing petroleum resource basins in Canada’s Athabasca oil sands and even with oil at $35, it can still make money, pay a dividend, and wait for better times.
Shares of Suncor Energy could be a very good investment option, this stock remains in Berkshire Hathaway’s portfolio and the company is positioned to weather the COVID-related storms. According to the latest news, Suncor Energy declared CAD 0.21/share quarterly dividend which is in line with previous.
“Even with COVID-19 pandemic restrictions resulting in lower demand and challenging cracking margins, our downstream business once again proved its strength, contributing nearly $600 million of funds flow from operations in the last quarter,” said Mark Little – President & Chief Executive Officer.
Despite this, the next several months will be competitive for this industry and the price of Suncor Energy shares could also weaken in the upcoming weeks. Production guidance for 2020 has been revised downward and there are also some obvious risks when it comes to investing in Suncor Energy stock.
Suncor Energy reported a larger than expected Q3 adjusted loss and a 35% Y/Y decrease in revenues. The company will accelerate previously announced workforce reductions of up to 15% over the next year to achieve a $1B operating cost reduction.
This stock could be a good long-term investment but maybe now is not the best time for investing in Suncor Energy shares because the price could weaken again.
Technical Analysis: Bulls still remain in control of the price action
On this chart, I marked important resistance and support levels. The important support levels are $14 and $13, $16 and $18 represent the resistance levels. If the price jumps above $16 it would be a signal to buy Suncor Energy stock and we have the open way to $17.
Rising above $18 supports the continuation of the bullish trend and the next price target could be located around $20. On the other side, if the price falls below $13 it would be a strong “sell” signal and we have the open way to $11.
Suncor Energy primarily focuses on developing petroleum resource basins in Canada’s Athabasca oil sands and even with oil at $35, it can still make money, pay a dividend, and wait for better times. This stock is still attractively valued but maybe now is not the best moment for investing in Suncor Energy. Suncor Energy reported a 35% Y/Y decrease in revenues in Q3 and the company will accelerate previously announced workforce reductions.