Estimates On Sunoco Raised At BMO Capital (SUN)

BMO Capital Markets is raising its 2010 EPS estimate on Sunoco SUN after the refiner reported strong quarterly earnings yesterday. The Market Perform rating and $36 price target are not being changed. In the report, BMO notes, "Sunoco reported Q2/10 earnings from continuing operating of $158 million or $1.31 per share, significantly above both our estimate of $0.68 and the consensus estimate of $0.77. These strong earnings were primarily driven by higher-than-expected margins and throughput in the Refining segment." "Unfortunately the Refining and Marketing business is likely to remain challenged given the lower complexity of its asset base and the limited capital available for income improvement projects. As a result, we believe the company will trade in line with the group. Our target price of $36 implies a slight expansion in valuation metrics to 5.2x EV/EBITDA." Shares of Sunoco are sharply higher this morning, trading at $35.36, up $1.07.