Suncor’s leadership on ESG initiatives has been clouded by security incidents at its properties in recent years, as seven fatalities have occurred since 2017, including two since the start of the year. (Photo: 123RF)
What to do with stocks from Suncor, Yamana Gold and Apple? Here are some recommendations from analysts likely to move prices soon. Note: the author may have a totally different opinion from the one expressed.
Suncor (SU, $41.78): Company needs to regain investor confidence
Suncor released an update to its Environmental, Social and Governance (ESG) report this summer. According to analyst Chris MacCulloch, of Desjardins Securities, the document demonstrates Suncor’s adherence to ESG principles: “This is the report with the best understanding of ESG challenges that we have read to date in the Canadian industry. exploration, development and production of oil and gas,” he writes.
The analyst, however, acknowledges that Suncor’s leadership on ESG initiatives has been clouded by security incidents at its properties in recent years, as seven fatalities have occurred since 2017, including two since the start of the year. .
“We agree that the oil sands industry is fraught with challenges and Suncor has clearly failed to meet the safety expectations of its shareholders and senior management,” he added.
The analyst hopes the ESG report on the company’s oil sands properties, pushed back to the fall, will contain a few pages on Suncor’s recent progress on the workplace safety side.
“However, this is not a problem that will fix itself quickly and Suncor needs several consecutive quarters without security incidents to slowly begin to regain investor confidence,” he believes.
Earlier this year, Suncor management announced its decision to divest itself of its solar and wind businesses to focus on the development of renewable fuels and hydrogen in order to become a zero company. emissions by 2050.
“We believe this strategy offers natural synergies with oil sands oil production and refining. It will also be able to benefit from Suncor’s expertise in the development of autonomous renewable energy projects,” says Chris MacCulloch.
According to him, Suncor could also improve its value chain by focusing on ESG initiatives, for example by increasing the number of charging stations across its network of Petro-Canada service stations.
The analyst reiterates his buy recommendation on Suncor stock with a one-year target price of $57.
Yamana Gold (YRI, $6.09): Technical reports ahead of crucial vote