Benchmark Downgrades Sunoco (SUN) to Sell; Pro-Forma Valuation Considerations

Benchmark downgraded Sunoco (NYSE: SUN) from Hold to Sell. PT $34.

Benchmark analyst says, "We are downgrading the shares of Sunoco based upon the pro-forma valuation implications of our unfavorably revised earnings/cash flow outlook...Our more cautious investment posture also reflects our revised belief that a liquidation value scenario (which had favorably influenced our prior valuation analysis), given more recent management comments regarding the intent to continue as s going concern, should be essentially dismissed...we have reduced our full year 2011 estimate to a loss of $0.82 per share from a $2.03 per share profit, previously. Our downward revised 2011 estimate includes a projected first quarter loss of $0.77 per share. We are establishing a preliminary 2012 estimate of $1.20 per share which reflects the favorable impact of the start-up of the Middletown coke plant as well as an assumed reduction in unplanned refinery downtime."

For more ratings news on Sunoco click here and for the rating history of Sunoco click here.

Shares of Sunoco closed at $42.89 yesterday.

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