Suncor Energy was said to be undervalued by 64.6% after a DCF model put its fair value at CA$268.23 per share, far above a share price of about CA$95. For investors, that leaves a wide gap between the market price and the valuation case after a 104.4% return over the last year.
Suncor and CA$268.23
The valuation came from a 2 Stage Free Cash Flow to Equity model, which used Suncor’s latest twelve month free cash flow of CA$6.77b. Simply Wall St projected that figure at CA$10.06b in 2028, a jump that supports the higher intrinsic value in the model.
CA$268.23 per share versus about CA$95 also means the model assigned Suncor a 64.6% discount to fair value. That gap is the entire story for anyone deciding whether the stock still offers room after the run-up.
Suncor's 19.06x P/E
19.06x was Suncor’s current P/E ratio, just below the Oil and Gas industry average of 19.49x and under the peer average of 22.28x. Simply Wall St’s Fair Ratio for Suncor was 21.95x, giving the stock a reference multiple above where it traded.
21.95x against 19.06x leaves the stock priced below the framework’s benchmark even before using the DCF estimate. The comparison does not erase the rally, but it shows the market still valued Suncor at a discount to the level implied by the model.
2028 Free Cash Flow Outlook
CA$10.06b in projected free cash flow for 2028 is the number that carries the valuation argument forward. If that projection holds, the case for a higher intrinsic value stays intact even after a 104.4% one-year return.
104.4% over the last year is the complication in the setup: the share price has already moved sharply, yet the DCF still leaves a 64.6% gap. The practical question for holders is whether the current CA$95 price already reflects the cash-flow outlook or still trails it by a wide margin.
