(Idea) Suncor Energy - More Upside Ahead

By: Jon Costello

Note: Dollar values are in Canadian dollars unless otherwise specified.

Suncor (SU) CEO Rich Kruger is the gift that keeps on giving for the company’s shareholders. I’ve been investing in capital-intensive industries and turnaround situations since 2008, and I’ve never seen anything like what he’s accomplished at Suncor in terms of both the size and speed of the turnaround.

Upon becoming Suncor CEO, Kruger inherited a company with a well-functioning downstream segment but a poorly managed upstream segment. As such, the company failed to realize the benefits of its integrated business model. It was plagued by an awful safety record and was seemingly incapable of improving underperforming assets, such as its bitumen mining operation at Fort Hills. Results were regularly sub-par, causing the shares to trade at a depressed multiple.

Since Kruger’s appointment in April 2023, he has molded Suncor into a guidance-beating machine. The company showed as much in an operational update released on Monday. The release detailed Suncor’s full-year 2024 performance, highlighting its progress on all of management’s stated operational goals. Altogether, the company exceeded guidance in every area and notched nine new operating records. These include: