There are numerous high undervalued shares for traders to think about in 2026, even with most world indices now buying and selling at or close to all-time highs.
On this house, I proceed to assume Suncor (TSX:SU) is one high Canadian vitality inventory that may very well be poised for giant strikes increased.
Right here’s why I stay bullish on Suncor for the long run, and it surprisingly doesn’t have as a lot to do with rising oil costs as traders might imagine.
Supply: Getty Pictures
Why is Suncor such a terrific alternative?
To start out, Suncor’s current fundamentals have been greater than stable.
The corporate simply posted report numbers on the operational entrance. Suncor not too long ago hit all‑time highs in upstream manufacturing, upgrader utilization, and refining throughput. Impressively, these outcomes all got here whereas Suncor introduced the corporate has achieved its 2024 Investor Day targets a full 12 months early.
These targets included boosting normalized free money circulate by billions of {dollars}, reducing its company WTI breakeven by about US$10 per barrel, reducing web debt to across the $6–$8 billion vary, and unlocking a framework whereby “all extra funds” now circulate to shareholders. In different phrases, traders are taking a look at a structurally leaner operator with extra barrels, decrease prices, and a clearer capital‑return mandate than at any level prior to now decade
What actually units up 2026 is Suncor’s plan to develop manufacturing whereas really trimming capital spending. The corporate’s anticipated CapEx funds has been decreased from final 12 months. That mentioned, Suncor nonetheless expects to supply mine enhancements and oil sands expansions.
If these tasks proceed as deliberate, these increased oil costs ought to translate into skyrocketing earnings within the coming quarters. Whereas a few of that is priced in proper now, I’d argue there’s extra lead left within the pencil for traders right this moment.
Valuation issues
Regardless of this reset, Suncor nonetheless trades at a ahead worth‑to‑earnings a number of within the low‑teenagers. At present, this quantity is available in at round 16 instances trailing earnings. That’s very low-cost for a inventory with a 3.1% dividend yield and probably the greatest steadiness sheets within the oil patch.
In different phrases, for traders trying to generate publicity to probably the greatest blue-chip shares in a sector that ought to proceed to catch a bid for a really very long time, Suncor seems to be like a high decide of mine proper now.
This inventory stays very low-cost, regardless of ongoing geopolitical uncertainty I anticipate to proceed. Thus, as each a defensive worth, dividend and progress play, there’s quite a bit to love about how Suncor is positioned right here.
