Suncor Energy: Buy, Sell, or Hold in 2026?

Suncor Energy (TSX:SU) has transformed itself in the last few years. As a result, Suncor Energy’s stock price has rallied almost 70% in the last three years. A new CEO, plenty of cost-cutting and efficiency gains later, and Suncor continues to break records.

But what’s in store for 2026? Can Suncor Energy stock continue its winning streak?

Shareholder returns focus, with increased buybacks

I’d like to start off by highlighting Suncor’s commitment to shareholder returns. This is something that has taken the company and Suncor’s stock price to new heights. I touched upon the stock’s 70% gain in my introduction. But there’s more. Since 2023, Suncor’s annual dividend has increased 15.4% to the current $2.40.

Along with all of this, Suncor has been buying back shares. This has brought additional value to shareholders by reducing the number of shares outstanding, thereby enhancing the value of the remaining shares. In 2026, Suncor increased its commitment to shareholders by increasing share buybacks by 10% to $275 million per month. This equates to an expected $3.3 billion of repurchases in 2026.

This commitment to shareholder value creation is evident through these facts. But these facts are even more impressive when we consider the fact that oil prices have declined pretty significantly since 2023.

Suncor: Not defined by commodity cycles

Suncor’s goal has been pretty clear — transformation. Transformation from a cyclical company whose fortunes are tied to oil prices to an industrial machine that has control over its own fortunes. As Suncor Energy’s CEO puts it, a company that’s “not defined by commodity cycles.”

We can expect Suncor’s results in 2026 to increasingly reflect this. As Suncor continues to move toward being a company that’s predictable and reliable regardless of the external environment, this will be reflected in its results.

Already, this has been a hallmark of Suncor’s recent results. In the third quarter, Suncor’s adjusted funds from operations came in at $3.8 billion or $3.16 per share. This was the second-highest third quarter in history. Suncor achieved this result despite lower West Texas Intermediate oil prices.

In Suncor’s most recent quarter, we saw more of the same. Oil prices were 15% lower compared to the prior year. Yet, Suncor reported strong earnings and cash flows, with adjusted funds flow coming in only 8% lower. Also, Q4 cash flow was 6% higher sequentially despite oil being at $59 versus $71. This was driven by higher production and lower costs.

What’s in store for 2026?

Suncor’s recent success is reflected in the company’s record upstream production, record refining throughput and record asset utilization levels. These measures are all measures of productivity, efficiency, and all-around operational strength.

The point here is that Suncor continues to strengthen its business, and regardless of oil prices, the company is creating shareholder value. This is evidenced in the fact that the oil price at which Suncor breaks even continues to fall. It now stands in the low $40 range. Oil prices are trading in the mid-$60 range today.

The bottom line

In 2026, the company will likely continue to benefit from this dynamic. The focus will remain on financial resiliency and predictability. We can expect an update in March, where Suncor will outline its improvement plans for the next three to 15 years out. The company’s vision is to be a predictable and reliable industrial company with a focus on shareholder returns and value creation. We are starting to see this in Suncor’s results. We can expect to see more of it in the year and years ahead, which is likely to drive Suncor Energy’s stock price and shareholder returns higher.

The post Suncor Energy: Buy, Sell, or Hold in 2026? appeared first on The Motley Fool Canada.

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More reading

• Top Energy Stocks to Invest in for 2026
• Top Canadian Stocks to Buy With $10,000 in 2026
• The Canadian Companies Thriving Despite (or Because of) Trade Tensions
• A Canadian Stock Poised for a Massive Comeback in 2026
• How to Pick the Best 5%+ Dividends in the Canadian Energy Sector

Fool contributor Karen Thomas has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.