Suncor surges on accelerated stock buybacks, debt reduction plans

Suncor Energy (NYSE:SU) +2.9% in Tuesday’s trading, poised for its highest closing price in more than 13 years, after the company accelerated plans to ramp up stock buybacks, Bloomberg reported.

Suncor (SU) said it raised spending on share repurchases to 75% of its free funds flow this quarter, and buybacks will ramp up to essentially all of its free funds when it cuts net debt to C$8B (~US$5.9B) from just under C$9B currently.

Kruger said Tuesday that Suncor (SU) expects to reach its new debt target by mid-2025 or perhaps even by the end of this year, and the company said it expects to add C$3.3B to free funds flow by 2026 and lower its breakeven oil price level by $10/bbl to $43/bbl in the same period, according to Bloomberg.

When activist investor Elliott Management launched its campaign two years ago to shake up the company, it held a 3.4% economic interest in Suncor (SU); it now holds a 4.1% direct stake that makes it the company’s fourth largest investor, according to data compiled by Bloomberg.

Elliott reportedly has increased its stake in Suncor (SU) because of the positive results on its performance and safety, and it still believes the stock has the potential for significant gain.