1 Canadian Energy Stock That Looks Like a Compelling Buy Right Now

Suncor stock’s improvement plan just got help from soaring oil prices. Expect strong cash flows to continue to drive shareholder returns.

Karen Thomas, MSc, CFA

Karen is a stock market enthusiast focused on uncovering those stocks that she believes the market has mispriced. She does this through fundamental and quantitative analysis of companies and their industries, as well as a study of future opportunities and trends. She holds a Masters degree in Finance, the CFA designation, and has over 20 years of experience in the investment management industry. Having worked at a major pension fund, as well as two leading mutual fund firms as an analyst and portfolio manager, she has solid investing expertise which she aims to share with her readers.

Published April 24, 8:30 pm EDT

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Key Points

• Oil prices have surged to over $95 per barrel due to geopolitical tensions including U.S.-Iran deadlock and Strait of Hormuz blockade, driving Suncor's stock up nearly 40% to $86.91.
• Suncor benefits from premium pricing through its upgrading process, realizing $70.86 per barrel versus $59.31 WTI in Q4 2025, with first quarter 2026 earnings estimates showing 26.7% growth to $1.66 per share.
• The company's three-year plan targets $2 billion in additional free cash flow by 2028 and reducing break-even costs to $38 per barrel, while maintaining strong financial position with net debt at less than one times cash flow.

Oil prices today are trading at more than $95 per barrel. The U.S. and Iran peace talks are in a deadlock. The Strait of Hormuz remains blocked. Fear and uncertainty have taken over oil markets.

Canadian energy stocks like Suncor Inc. (TSX:SU) have been beneficiaries of this turmoil. Let’s take a look at why Suncor stock remains an energy stock to own through this ordeal.

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Oil prices soar

In the fourth quarter of 2025, the average West Texas Intermediate (WTI) oil price was $59.31 per barrel. During this time, Suncor’s average realized price was $70.86. That’s almost 20% higher than the WTI price. This is made possible by Suncor’s value-added upgrading process, which refines crude oil into products such as gasoline, jet fuel, and petrochemicals.

Last quarter marked the calm before the storm. Since then, WTI prices have rallied off of the supply threats caused by the Iran War. In fact, in the first quarter of 2025, oil prices are estimated to have averaged $71.90. This is 21.2% higher than in the prior quarter. All of this has caused Canadian energy stocks such as Suncor to rally. As you can see from the graph below, Suncor Energy’s stock price has risen almost 40% to its current price of $86.91.

Cash windfall to benefit Canadian energy stocks

Suncor Energy stock is scheduled to report its first quarter 2026 results on May 5^th. As you might expect, analyst earnings estimates have been rising rapidly. For the first quarter, the consensus earnings per share (EPS) estimate currently stands at $1.66. This compares to EPS of $1.31 in the same period last year, which pegs Suncor stock’s earnings growth rate at 26.7%.

In recent years, Suncor has been on a mission to reduce its debt, lower costs, and drive shareholder value. All of these goals just got a lot of help from the market. With oil prices skyrocketing, Suncor will be able to fast-track these targets, creating more value for its shareholders in a shorter amount of time.

Suncor – Looking ahead

Back in March, Suncor held its 2026 Investor Day, where the company outlined its new three-year improvement plan. This plan calls for a $2 billion increase in normalized free funds flow by 2028 and a $5 per barrel reduction in Suncor’s corporate break-even to US$38 per barrel by 2028. Record refinery utilization and production are enabling Suncor to continue to lower its costs and drive increasing returns. We can expect this momentum to continue.

Turning to Suncor’s balance sheet, we have already seen the company dramatically improve its financial resiliency in recent quarters. As at the end of 2025, Suncor stock carried $6.3 billion in net debt, which is less than one times cash flow at a WTI oil price of US$50.

The bottom line

Suncor stock remains a compelling buy, as the company is taking advantage of the positive oil price momentum. This is driving up cash flows, which I expect will be put to good use, all in the name of shareholder value creation. Share buybacks have increased in recent quarters, and this is likely to continue.

In short, Suncor remains one of the best Canadian energy stocks to buy now.