Implied volatility in Suncor
In the previous part, we discussed Suncor Energy’s (SU) stock performance compared to oil prices and the broader market in the past month. In this part, we’ll discuss the price range forecast for Suncor Energy stock in the 13 days until its earnings. Suncor is expected to post its fourth-quarter earnings on February 5. The price range forecast will be based on the current implied volatility in Suncor.
The implied volatility in Suncor has fallen by 11.7 percentage points compared to December 24 to the current level of 27.3%. During the same period, Suncor stock has risen 18.9%.
Expected price range
Considering Suncor’s implied volatility of 27.3% 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 $32.7 per share and $29.5 per share in the 13 days ending February 5.
Peers’ implied volatilities
Like Suncor, the implied volatility in Petrobras (PBR) and PetroChina (PTR) has fallen by 14.5 percentage points and 3.6 percentage points, respectively, since December 24. Currently, the implied volatility in Petrobras and PetroChina is 39.1% and 29.2%, respectively. The implied volatility in Chevron (CVX) has fallen by 13.9 percentage points compared to December 24 to the current level of 23.5%.
If we review the stock prices, then Petrobras, PetroChina, and Chevron stocks have risen 27.9%, 3.1%, and 10.3%, respectively, since December 24.
In the next part, we’ll review analysts’ ratings for Suncor before its fourth-quarter earnings.