What’s the Forecast for Suncor Stock?


Sep. 25 2018, Updated 4:25 p.m. ET

Price range for Suncor stock

In this part, we’ll estimate Suncor’s (SU) stock price based on its current implied volatility. The implied volatility in Suncor (SU) has fallen by 6.6 percentage points compared to July 2 to the current level of 19.6%. During the same period, Suncor stock has decreased 3.3%.

Considering Suncor’s implied volatility of 19.6% and assuming a normal distribution of prices (bell curve model) and standard deviation of one (with a probability of 68.2%), Suncor’s stock price could close between $40.1 and $38.0 per share in the next seven calendar days ending on September 28. Currently, the stock trades at $39.1 per share.

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Peers’ implied volatility

The implied volatility in BP (BP) has fallen by 8.1 percentage points compared to July 2 to the current level of 14.4%. The implied volatility in YPF (YPF) and ENI (E) has fallen by 6.7 percentage points and 0.7 percentage points, respectively, during the same period. Currently, YPF and ENI have their implied volatilities at 43.6% and 19.3%, respectively. If we review stock prices during the same period, BP’s stock price has fallen 1.2%. YPF and ENI’s stock prices have risen 29.4% and 5.1%, respectively, compared to July 2.

The implied volatility in the SPDR Dow Jones Industrial Average ETF (DIA) and the SPDR S&P 500 ETF’s (SPY), which closely resemble the Dow Jones Industrial Average and the S&P 500 Index, respectively, have also fallen.

The implied volatilities in DIA and SPY have fallen by 3.5 percentage points and 2.8 percentage points, respectively, compared to July 2 to the current levels of 10.1% and 7.8%, respectively. During the same period, DIA and SPY’s values have risen 10.0% and 7.4%, respectively.

Next, we’ll review Suncor’s dividend yield trend.


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