Sunoco (SUN) is back in focus after reporting strong first quarter 2026 results, highlighting higher motor fuel volumes, firmer profit per gallon and a 6.25% rise in its quarterly distribution to unitholders.

At a share price of $65.80, Sunoco has had a strong year to date, with a 24.79% share price return and a 31.32% total shareholder return over the past 12 months, building on multi year gains that suggest momentum in the investment case.

If Sunoco’s latest results have you watching the fuel and infrastructure space more closely, it can be useful to compare it with other companies through our 34 power grid technology and infrastructure stocks

With the units trading at $65.80, a value score of 3, an indicated intrinsic discount, and a 12.7% gap to the average analyst price target, the key question is whether Sunoco is still underpriced or if the market is already reflecting future growth.

Most Popular Narrative: 11.2% Undervalued

Analysts currently see Sunoco’s fair value at $74.13, compared with the last close at $65.80, framing a moderate undervaluation built on detailed growth and margin assumptions.

The NuStar and upcoming Parkland and TanQuid acquisitions are expected to deliver substantial double-digit accretion and cost synergies, further increasing operating leverage and net margins while materially enhancing Sunoco's international and midstream asset footprint.

Curious what kind of revenue run rate, margin lift and future earnings multiple are baked into that $74.13 figure? The narrative stitches together fuel demand assumptions, acquisition synergy timelines and a lower future P/E that still needs to clear today’s earnings base. The full story explains how those moving parts align to support the current fair value target.

Result: Fair Value of $74.13 (UNDERVALUED)

However, there are still real pressure points here, including Sunoco’s reliance on traditional fuel distribution, as well as the execution and leverage risks tied to the NuStar and Parkland deals.

Another View: Market Pricing Versus Fair Ratio

Those fair value estimates paint Sunoco as undervalued, but the market is not giving it away cheaply on earnings. The current P/E of 16.7x sits above both the US Oil and Gas industry at 13.8x and the peer average at 10.9x, yet below a fair ratio of 27.3x implied by Simply Wall St’s model.

In practice, that means the stock trades at a premium to many direct comparables, which can limit room for error, while still sitting at a discount to where the fair ratio model suggests the P/E could move over time. The question is which reference point you trust most when you weigh risk versus potential upside from here.

Next Steps

If this mix of upside and risk feels finely balanced, move quickly to review the data, pressure test the assumptions, and weigh the 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

If Sunoco has your attention, do not stop here. Broaden your watchlist with a few focused stock ideas that could sharpen your next move.

• Target income potential by scanning companies with resilient payouts through the 9 dividend fortresses.
• Hunt for quality at a discount by searching stocks flagged as 48 high quality undervalued stocks.
• Prioritize capital preservation by focusing on companies highlighted in the 63 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.