Suncor Energy to lay off up to 2,000 people


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“Suncor’s stocks underperformed their peers and crude oil prices in 2020 following the 55% reduction in its dividend and third quarter operational challenges in its oil sands business,” said Suncor BMO Capital Markets analyst Randy Ollenberger in an October 1 research note.

Ollenberger said he believes the shares are offering “under appreciated” and may recover as the company’s refining business improves.

The company has integrated operations with refineries in Alberta, Ontario, Quebec and Colorado.

Refineries have been hit hard in the coronavirus outbreak as commuters have stayed at home and air travel has been severely curtailed since March.

Additionally, Suncor is one of the costliest mining companies in the oil sands and the cuts announced on Friday should help align the company’s per barrel operating costs, said Phil Skolnick, New York analyst at Eight Capital.

“How permanent are these cuts? If oil came back to $ 55 or $ 50 and we got out of the pandemic, how many of those products would come back? Skolnick said, adding that the market and investors are looking for permanent cost reductions.

He said it was not yet clear how a 15 percent reduction in staff would reduce operating costs to profitability.

The Suncor Energy Center building in downtown Calgary. Photo by Azin Ghaffari / Postmedia

RBC Capital Market analysts expectSuncor is restoring momentum onseveral fronts in the coming quarters and maintained its outperformancerecommendation on company stocks with a one-year price target of $ 25 pershare.

“Suncor does not intend to go into renewables over a largeRBC analyst Greg Pardy said in a note, after hosting a virtual tour with CEO of Suncor Little for European investors. “On the contrary, the company is likely to become a niche player, targeting ESG (environmental, social and governance) investments, which generate at least returns in mid-adolescence. These are probablyto include biofuels, hydrogen, C02sequestration and select wind projects. “


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