Sunoco: Long-Term Distribution Growth Makes Units Attractive (Rating Upgrade)

Sunoco LP is upgraded to "Buy" after a recent sell-off, presenting an attractive entry for income-focused investors. Recent results highlight robust EBITDA growth, driven by the Parkland acquisition and elevated crack spreads, with excess profits likely to persist through 2027. SUN maintains a strong balance sheet with 3.5x leverage, ample distribution coverage, and a 6.3% yield targeted to grow 5% annually.