Intrinsic value of Suncor Energy - SU

Previous Close

$33.52

  Intrinsic Value

$154.85

stock screener

  Rating & Target

str. buy

+362%

Previous close

$33.52

 
Intrinsic value

$154.85

 
Up/down potential

+362%

 
Rating

str. buy

We calculate the intrinsic value of SU stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 55.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  26.00
  23.90
  22.01
  20.31
  18.78
  17.40
  16.16
  15.04
  14.04
  13.14
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
Revenue, $m
  31,847
  39,459
  48,144
  57,921
  68,798
  80,769
  93,821
  107,936
  123,090
  139,259
  156,419
  174,548
  193,628
  213,645
  234,591
  256,464
  279,267
  303,010
  327,712
  353,394
  380,086
  407,824
  436,649
  466,609
  497,755
  530,147
  563,848
  598,925
  635,454
  673,512
Variable operating expenses, $m
  6,976
  8,585
  10,422
  12,490
  14,790
  17,322
  20,082
  23,068
  26,272
  29,692
  33,081
  36,915
  40,950
  45,183
  49,613
  54,239
  59,061
  64,083
  69,307
  74,738
  80,383
  86,249
  92,345
  98,682
  105,269
  112,119
  119,246
  126,665
  134,390
  142,439
Fixed operating expenses, $m
  15,914
  16,264
  16,621
  16,987
  17,361
  17,743
  18,133
  18,532
  18,940
  19,356
  19,782
  20,217
  20,662
  21,117
  21,581
  22,056
  22,541
  23,037
  23,544
  24,062
  24,592
  25,133
  25,685
  26,251
  26,828
  27,418
  28,021
  28,638
  29,268
  29,912
Total operating expenses, $m
  22,890
  24,849
  27,043
  29,477
  32,151
  35,065
  38,215
  41,600
  45,212
  49,048
  52,863
  57,132
  61,612
  66,300
  71,194
  76,295
  81,602
  87,120
  92,851
  98,800
  104,975
  111,382
  118,030
  124,933
  132,097
  139,537
  147,267
  155,303
  163,658
  172,351
Operating income, $m
  8,958
  14,610
  21,100
  28,444
  36,647
  45,704
  55,606
  66,337
  77,878
  90,211
  103,556
  117,416
  132,016
  147,345
  163,397
  180,169
  197,664
  215,890
  234,861
  254,594
  275,111
  296,442
  318,618
  341,677
  365,659
  390,610
  416,580
  443,623
  471,796
  501,161
EBITDA, $m
  14,874
  21,883
  29,921
  39,007
  49,148
  60,339
  72,567
  85,813
  100,055
  115,270
  131,433
  148,523
  166,524
  185,420
  205,205
  225,875
  247,434
  269,892
  293,265
  317,574
  342,849
  369,123
  396,437
  424,834
  454,367
  485,091
  517,067
  550,361
  585,045
  621,193
Interest expense (income), $m
  734
  661
  1,145
  1,708
  2,350
  3,073
  3,877
  4,763
  5,728
  6,772
  7,892
  9,088
  10,357
  11,698
  13,108
  14,589
  16,138
  17,755
  19,441
  21,197
  23,024
  24,923
  26,897
  28,948
  31,080
  33,295
  35,599
  37,994
  40,486
  43,080
  45,782
Earnings before tax, $m
  8,297
  13,465
  19,392
  26,094
  33,574
  41,827
  50,843
  60,609
  71,106
  82,319
  94,468
  107,059
  120,318
  134,237
  148,808
  164,031
  179,909
  196,449
  213,664
  231,570
  250,188
  269,545
  289,670
  310,597
  332,363
  355,011
  378,586
  403,136
  428,716
  455,380
Tax expense, $m
  2,240
  3,636
  5,236
  7,045
  9,065
  11,293
  13,728
  16,364
  19,199
  22,226
  25,506
  28,906
  32,486
  36,244
  40,178
  44,288
  48,575
  53,041
  57,689
  62,524
  67,551
  72,777
  78,211
  83,861
  89,738
  95,853
  102,218
  108,847
  115,753
  122,953
Net income, $m
  6,057
  9,829
  14,157
  19,049
  24,509
  30,534
  37,116
  44,244
  51,908
  60,093
  68,962
  78,153
  87,832
  97,993
  108,630
  119,743
  131,333
  143,408
  155,974
  169,046
  182,637
  196,768
  211,459
  226,736
  242,625
  259,158
  276,368
  294,290
  312,962
  332,427

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  88,465
  109,608
  133,733
  160,893
  191,105
  224,358
  260,615
  299,823
  341,917
  386,831
  434,497
  484,856
  537,855
  593,458
  651,642
  712,399
  775,741
  841,696
  910,311
  981,650
  1,055,795
  1,132,845
  1,212,914
  1,296,135
  1,382,653
  1,472,631
  1,566,243
  1,663,681
  1,765,150
  1,870,867
Adjusted assets (=assets-cash), $m
  88,465
  109,608
  133,733
  160,893
  191,105
  224,358
  260,615
  299,823
  341,917
  386,831
  434,497
  484,856
  537,855
  593,458
  651,642
  712,399
  775,741
  841,696
  910,311
  981,650
  1,055,795
  1,132,845
  1,212,914
  1,296,135
  1,382,653
  1,472,631
  1,566,243
  1,663,681
  1,765,150
  1,870,867
Revenue / Adjusted assets
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
Average production assets, $m
  73,217
  90,716
  110,683
  133,161
  158,166
  185,688
  215,696
  248,145
  282,984
  320,157
  359,607
  401,286
  445,150
  491,170
  539,325
  589,610
  642,034
  696,621
  753,409
  812,453
  873,818
  937,587
  1,003,856
  1,072,733
  1,144,339
  1,218,808
  1,296,285
  1,376,929
  1,460,909
  1,548,404
Working capital, $m
  -446
  -552
  -674
  -811
  -963
  -1,131
  -1,314
  -1,511
  -1,723
  -1,950
  -2,190
  -2,444
  -2,711
  -2,991
  -3,284
  -3,590
  -3,910
  -4,242
  -4,588
  -4,948
  -5,321
  -5,710
  -6,113
  -6,533
  -6,969
  -7,422
  -7,894
  -8,385
  -8,896
  -9,429
Total debt, $m
  21,200
  31,624
  43,517
  56,907
  71,802
  88,195
  106,070
  125,399
  146,152
  168,294
  191,794
  216,621
  242,749
  270,162
  298,846
  328,799
  360,027
  392,543
  426,370
  461,540
  498,094
  536,079
  575,554
  616,581
  659,235
  703,594
  749,745
  797,782
  847,806
  899,924
Total liabilities, $m
  43,613
  54,037
  65,930
  79,320
  94,215
  110,609
  128,483
  147,813
  168,565
  190,708
  214,207
  239,034
  265,163
  292,575
  321,259
  351,213
  382,440
  414,956
  448,783
  483,953
  520,507
  558,492
  597,967
  638,995
  681,648
  726,007
  772,158
  820,195
  870,219
  922,337
Total equity, $m
  44,852
  55,571
  67,803
  81,573
  96,890
  113,750
  132,132
  152,010
  173,352
  196,123
  220,290
  245,822
  272,693
  300,883
  330,382
  361,186
  393,300
  426,740
  461,527
  497,696
  535,288
  574,352
  614,948
  657,140
  701,005
  746,624
  794,085
  843,486
  894,931
  948,529
Total liabilities and equity, $m
  88,465
  109,608
  133,733
  160,893
  191,105
  224,359
  260,615
  299,823
  341,917
  386,831
  434,497
  484,856
  537,856
  593,458
  651,641
  712,399
  775,740
  841,696
  910,310
  981,649
  1,055,795
  1,132,844
  1,212,915
  1,296,135
  1,382,653
  1,472,631
  1,566,243
  1,663,681
  1,765,150
  1,870,866
Debt-to-equity ratio
  0.470
  0.570
  0.640
  0.700
  0.740
  0.780
  0.800
  0.820
  0.840
  0.860
  0.870
  0.880
  0.890
  0.900
  0.900
  0.910
  0.920
  0.920
  0.920
  0.930
  0.930
  0.930
  0.940
  0.940
  0.940
  0.940
  0.940
  0.950
  0.950
  0.950
Adjusted equity ratio
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507
  0.507

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6,057
  9,829
  14,157
  19,049
  24,509
  30,534
  37,116
  44,244
  51,908
  60,093
  68,962
  78,153
  87,832
  97,993
  108,630
  119,743
  131,333
  143,408
  155,974
  169,046
  182,637
  196,768
  211,459
  226,736
  242,625
  259,158
  276,368
  294,290
  312,962
  332,427
Depreciation, amort., depletion, $m
  5,916
  7,273
  8,821
  10,563
  12,501
  14,635
  16,961
  19,477
  22,177
  25,059
  27,877
  31,107
  34,508
  38,075
  41,808
  45,706
  49,770
  54,002
  58,404
  62,981
  67,738
  72,681
  77,818
  83,158
  88,708
  94,481
  100,487
  106,739
  113,249
  120,031
Funds from operations, $m
  11,973
  17,102
  22,977
  29,612
  37,010
  45,168
  54,077
  63,721
  74,085
  85,151
  96,838
  109,261
  122,340
  136,068
  150,438
  165,449
  181,104
  197,409
  214,378
  232,027
  250,375
  269,449
  289,277
  309,893
  331,334
  353,639
  376,855
  401,028
  426,211
  452,459
Change in working capital, $m
  -92
  -107
  -122
  -137
  -152
  -168
  -183
  -198
  -212
  -226
  -240
  -254
  -267
  -280
  -293
  -306
  -319
  -332
  -346
  -360
  -374
  -388
  -404
  -419
  -436
  -453
  -472
  -491
  -511
  -533
Cash from operations, $m
  12,065
  17,209
  23,099
  29,749
  37,163
  45,336
  54,259
  63,919
  74,297
  85,378
  97,079
  109,514
  122,607
  136,348
  150,731
  165,755
  181,423
  197,742
  214,724
  232,386
  250,749
  269,837
  289,681
  310,313
  331,770
  354,093
  377,327
  401,519
  426,723
  452,991
Maintenance CAPEX, $m
  -4,505
  -5,676
  -7,032
  -8,580
  -10,323
  -12,261
  -14,394
  -16,721
  -19,236
  -21,937
  -24,818
  -27,877
  -31,107
  -34,508
  -38,075
  -41,808
  -45,706
  -49,770
  -54,002
  -58,404
  -62,981
  -67,738
  -72,681
  -77,818
  -83,158
  -88,708
  -94,481
  -100,487
  -106,739
  -113,249
New CAPEX, $m
  -15,104
  -17,499
  -19,967
  -22,479
  -25,005
  -27,521
  -30,008
  -32,450
  -34,839
  -37,172
  -39,451
  -41,679
  -43,865
  -46,019
  -48,155
  -50,285
  -52,424
  -54,587
  -56,788
  -59,043
  -61,365
  -63,769
  -66,269
  -68,877
  -71,606
  -74,469
  -77,478
  -80,644
  -83,979
  -87,496
Cash from investing activities, $m
  -19,609
  -23,175
  -26,999
  -31,059
  -35,328
  -39,782
  -44,402
  -49,171
  -54,075
  -59,109
  -64,269
  -69,556
  -74,972
  -80,527
  -86,230
  -92,093
  -98,130
  -104,357
  -110,790
  -117,447
  -124,346
  -131,507
  -138,950
  -146,695
  -154,764
  -163,177
  -171,959
  -181,131
  -190,718
  -200,745
Free cash flow, $m
  -7,544
  -5,966
  -3,900
  -1,310
  1,835
  5,554
  9,857
  14,748
  20,222
  26,269
  32,810
  39,959
  47,635
  55,821
  64,501
  73,662
  83,292
  93,385
  103,934
  114,939
  126,403
  138,330
  150,731
  163,618
  177,006
  190,915
  205,368
  220,388
  236,005
  252,247
Issuance/(repayment) of debt, $m
  8,962
  10,424
  11,894
  13,390
  14,895
  16,394
  17,875
  19,329
  20,753
  22,142
  23,499
  24,827
  26,129
  27,412
  28,684
  29,953
  31,228
  32,516
  33,827
  35,170
  36,554
  37,986
  39,474
  41,028
  42,653
  44,359
  46,151
  48,037
  50,024
  52,119
Issuance/(repurchase) of shares, $m
  3,144
  890
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  12,106
  11,314
  11,894
  13,390
  14,895
  16,394
  17,875
  19,329
  20,753
  22,142
  23,499
  24,827
  26,129
  27,412
  28,684
  29,953
  31,228
  32,516
  33,827
  35,170
  36,554
  37,986
  39,474
  41,028
  42,653
  44,359
  46,151
  48,037
  50,024
  52,119
Total cash flow (excl. dividends), $m
  4,563
  5,348
  7,993
  12,080
  16,730
  21,947
  27,732
  34,078
  40,975
  48,411
  56,309
  64,786
  73,764
  83,233
  93,185
  103,615
  114,520
  125,900
  137,761
  150,109
  162,956
  176,316
  190,205
  204,645
  219,660
  235,274
  251,519
  268,425
  286,028
  304,366
Retained Cash Flow (-), $m
  -9,201
  -10,720
  -12,231
  -13,770
  -15,318
  -16,859
  -18,382
  -19,878
  -21,342
  -22,771
  -24,167
  -25,532
  -26,871
  -28,191
  -29,499
  -30,804
  -32,114
  -33,439
  -34,788
  -36,169
  -37,592
  -39,064
  -40,595
  -42,193
  -43,865
  -45,619
  -47,462
  -49,401
  -51,444
  -53,599
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -4,638
  -5,372
  -4,238
  -1,690
  1,412
  5,088
  9,350
  14,199
  19,633
  25,640
  32,142
  39,254
  46,893
  55,043
  63,687
  72,811
  82,406
  92,461
  102,973
  113,941
  125,365
  137,251
  149,610
  162,452
  175,795
  189,656
  204,057
  219,024
  234,584
  250,767
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -4,447
  -4,918
  -3,688
  -1,392
  1,094
  3,693
  6,317
  8,875
  11,278
  13,442
  15,264
  16,751
  17,830
  18,479
  18,697
  18,503
  17,930
  17,028
  15,855
  14,478
  12,967
  11,388
  9,806
  8,274
  6,839
  5,533
  4,380
  3,389
  2,561
  1,888
Current shareholders' claim on cash, %
  94.6
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4
  93.4

Suncor Energy Inc is a Canada-based integrated energy company. The Company is focused on developing Canada's petroleum resource basin, Athabasca oil sands. The Company operates in three business segments: Oil Sands, Exploration and Production (E&P), and Refining and Marketing. The Company's Oil Sands segment includes Oil Sands operations and Oil Sands ventures operations. Its E&P segment consists of offshore operations off the east coast of Canada and in the North Sea, and onshore assets in North America, Libya and Syria. The Company's Refining and Marketing segment is engaged in Refining and Supply, and Marketing operations. In addition, it explores for, acquires, develops, produces and markets crude oil and natural gas in Canada and internationally. It transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada. It markets third-party petroleum products. The Company also conducts energy trading activities.

FINANCIAL RATIOS  of  Suncor Energy (SU)

Valuation Ratios
P/E Ratio 174.2
Price to Sales 2.8
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 13.3
Price to Free Cash Flow -83.7
Growth Rates
Sales Growth Rate -8.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -1.3%
Cap. Spend. - 3 Yr. Gr. Rate -0.6%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 36.1%
Total Debt to Equity 39.1%
Interest Coverage 1
Management Effectiveness
Return On Assets 6.7%
Ret/ On Assets - 3 Yr. Avg. 3.1%
Return On Total Capital 0.7%
Ret/ On T. Cap. - 3 Yr. Avg. 0.7%
Return On Equity 1%
Return On Equity - 3 Yr. Avg. 0.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 63.2%
Gross Margin - 3 Yr. Avg. 59.8%
EBITDA Margin 26.8%
EBITDA Margin - 3 Yr. Avg. 25.8%
Operating Margin -0%
Oper. Margin - 3 Yr. Avg. 4%
Pre-Tax Margin 0.3%
Pre-Tax Margin - 3 Yr. Avg. 1.6%
Net Profit Margin 1.6%
Net Profit Margin - 3 Yr. Avg. 0.5%
Effective Tax Rate -414.1%
Eff/ Tax Rate - 3 Yr. Avg. -123.8%
Payout Ratio 432.7%

SU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SU stock intrinsic value calculation we used $25275.72663 million for the last fiscal year's total revenue generated by Suncor Energy. The default revenue input number comes from 0001 income statement of Suncor Energy. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SU stock valuation model: a) initial revenue growth rate of 26% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for SU is calculated based on our internal credit rating of Suncor Energy, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Suncor Energy.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SU stock the variable cost ratio is equal to 22.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $15571 million in the base year in the intrinsic value calculation for SU stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Suncor Energy.

Corporate tax rate of 27% is the nominal tax rate for Suncor Energy. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SU stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SU are equal to 229.9%.

Life of production assets of 12.9 years is the average useful life of capital assets used in Suncor Energy operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SU is equal to -1.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $35650.4320503 million for Suncor Energy - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1640.98 million for Suncor Energy is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Suncor Energy at the current share price and the inputted number of shares is $55.0 billion.

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COMPANY NEWS

▶ Suncor Energy CEO to Retire Next Year   [07:00PM  Rigzone.com]
▶ $20 Canadian Oil Could Last Another Year   [Nov-05-18 07:00PM  Oilprice.com]
▶ Suncor Energy (SU) Beats Q3 Earnings Estimates   [Oct-31-18 08:40PM  Zacks]
▶ Suncor Profit Tops Estimates   [08:00PM  Rigzone.com]
▶ Suncor Energy: 3Q Earnings Snapshot   [07:35PM  Associated Press]
▶ Canadian Oil Patch Grapples With Cannabis Legalization   [Oct-18-18 01:00PM  Oilprice.com]
▶ CANADA STOCKS-Futures lower on global growth fears   [Oct-09-18 07:32AM  Reuters]
▶ [$$] Equinor to acquire Chevron North Sea stake   [Oct-01-18 07:37AM  Financial Times]
▶ Who Are Suncor Energy Incs (TSE:SU) Major Shareholders?   [Sep-24-18 10:53AM  Simply Wall St.]
▶ Oil Nears $80 On Iran Concerns   [Sep-11-18 03:00PM  Oilprice.com]
▶ CANADA STOCKS-TSX led higher by financial stocks   [Aug-13-18 10:37AM  Reuters]
▶ 10 Ways to Play Rising Energy   [Aug-10-18 01:50PM  Investopedia]
▶ Suncor Energy: 2Q Earnings Snapshot   [05:04AM  Associated Press]
▶ Suncor Energy declares dividend   [05:15PM  GlobeNewswire]
▶ Suncor releases 2018 Report on Sustainability   [Jul-19-18 05:30PM  GlobeNewswire]
▶ Pick Up Suncor Energy While Its Below $44   [Jul-12-18 12:39PM  InvestorPlace]
▶ Is Suncor Energy Inc. a Buy?   [Jul-03-18 11:32AM  Motley Fool]
▶ How Options Strategist Steve Sosnick Is Trading Suncor Energy   [Jun-28-18 06:55PM  Bloomberg Video]
▶ Is Suncor Energy Inc (TSE:SU) A Sell At Its Current PE Ratio?   [Jun-18-18 01:49PM  Simply Wall St.]

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