Refiner Sunoco Inc. (SUN), first discussed here on April 20, 2009 at a price of $26.58, continues to make up for lost time, clearing $40 resistance in the past three months, and the stock appears headed for $50 and beyond.

Sunoco, like other refiners, was hurt by the high oil price/low gasoline demand condition pervasive in the giant U.S. market during the Great Recession. Sluggish demand hurt refining margins throughout 2009 and in to 2010, and Sunoco's stock meandered accordingly. Then in late 2010, gasoline demand started to improve, and refiners were able to increase prices, improving margins.

Talk about late bloomers: refiner Sunoco Inc. (SUN), first discussed here on April 21, 2009, at a price of $26.58, has made it through gasoline's really tough period and has powered higher on signs of increasing gasoline demand.

Like other refiners of crude oil, Sunoco was hurt by the high oil price/low gasoline demand condition pervasive in the giant U.S. market. Sluggish demand squeezed refining margins throughout 2009 and in to 2010, and Sunoco's stock meandered accordingly.

To right-size for the new consumer budget-conscious era, Sunoco closed its Eagle Point refinery a year ago and also sold its polypropylene business. Related cost cuts followed.

Friday morning, U.S. oil refiner Sunoco (SUN) announced that it logged a third-quarter profit rather than a loss like last year's results.

Sunoco pulled in 54 cents per diluted share ($65 million) in the most recent quarter, better than the loss of 29 cents per share from a year ago. On an adjusted basis, Sunoco earned 22 cents per share. The stronger results were attributed to an improvement in earnings from the steel-making coal and logistics businesses.

Analyst Upgrades

• Oppenheimer upgraded Teva (TEVA) to outperform from perform. The firm expects the company to generate strong 2H10 earnings and thinks the competition created by Novartis's (NVS) Gilenia will be limited.
• Citigroup upgraded Celanese (CE) to buy from hold, citing valuation and the company's move to add assets in China, as well as possible takeover interest.
• Needham raised Stereotaxis (STXS) to buy from hold as the firm thinks that strong clinical data recently announced by the company could result in faster adoption rates of its robotic surgery.
• BMO Capital upgraded Smurfit-Stone Container (SSCC) given strength in the containerboard market.
• Melco Crown (MPEL) was upgraded to buy from neutral at UBS.
• Goldman Sachs raised Temple-Inland (TIN) to buy from neutral.
• Barclays upgraded Lloyds Banking (LYG) to equal weight from underweight.

Finally, investor patience is being rewarding with refiner Sunoco Inc. (SUN), first discussed here on April 20, 2009 at a price of $26.58.

Like other refiners of crude oil, Sunoco was hurt by the high oil price/low gasoline demand condition that took hold in the giant U.S. market: Sluggish demand hurt refining margins.

But now the U.S. gasoline market is showing signs of a rebound, and institutional investors (II) have started adding to their SUN positions, pushing the stock over $30 and back above the key, 50-day moving average.

Analyst Upgrades

• Collins Stewart upgraded BP (BP) to buy from hold after the company canceled its dividend payments and agreed to put $20 billion in a claims escrow fund.
• Credit Suisse upgraded First Solar (FSLR) to outperform from neutral and raised its target to $150 from $110.20. The firm raised estimates given expectations for strong demand and lower costs and believes pricing upside for Q2/Q3 is not reflected in valuation.
• Argus upgraded EMC (EMC) to buy from hold, citing valuation and notes that the company's VMware (VMW) stake is undervalued.
• Rio Tinto (RTP) was upgraded to buy from hold at Societe Generale.
• Sunoco (SUN) was upgraded to overweight from equal weight at Barclays.
• UBS (UBS) was upgraded to outperform from underperform at Macquarie.

When a stock meanders for a year, it's asking investors to exit the position. And that would have been the case with Sunoco Inc. (SUN), which I first discussed here on April 20, 2009, at a price of $26.58, had it not been for Sunoco's refinery operation designation.

Like other refiners of crude oil, Sunoco has been hurt by the high-oil-price and low-gasoline-demand condition pervasive in the giant U.S. market: Sluggish demand has hurt refining margins.

Analyst Upgrades

• UBS upgraded Dr Pepper Snapple (DPS) to buy from neutral, citing strong fundamentals and buybacks. The firm raised its target to $42 from $31.
• Piper Jaffray upgraded ProAssurance (PRA) to overweight from neutral. The firm has a $76 price target on shares.
• Hershey (HSY) and Sunoco (SUN) were upgraded to sell from conviction sell at Goldman.
• Level 3 Comm (LVLT) was upgraded to neutral from underweight at JPMorgan.
• Cathay Pacific (CPCAY) was upgraded to buy from hold at Deutsche Bank.

Time was, if you were an oil refiner, that was money in the bank. My, how times have changed for U.S. refiners, including Sunoco Inc. (SUN), first recommended on April 20, 2009, at a price of $26.58. It's a close call, but I'm reiterating my buy rating.

Here's why: Sunoco has been hurt by the high oil price/low gasoline demand condition pervasive in the giant U.S. market. Further, Sunoco's primarily sweet crude oil refining prevents it from capitalizing on the larger-margin sour crude refining. However, that has enabled SUN to produce larger amounts of higher-grade products.

Analyst Upgrades

• Baird upgraded Intel (INTC) to outperform from neutral and has a $26 target on the stock. The firm's checks indicate tier-one PC OEMs have raised their 1H10 procurement forecasts, which could lead to Intel outperformance.
• Citigroup upgraded UnitedHealth (UNH) to buy from hold on expectations the company will benefit from a sector rotation into Managed Care in 2010. The firm raised its price target on shares to $39 from $30.
• UBS upgraded Morgan Stanley (MS) to buy from neutral based on strong capital and liquidity positions, building investment banking pipelines, and expectations for a turn in EPS/ROE, among other reasons.
• Deutsche Bank upgraded the U.S. Refining group as it believes demand is improving and margins could expand in 2010. The firm raised its rating on Sunoco (SUN) to hold from sell and its target on shares to $25 from $18, and upgraded Tesoro (TSO) and Frontier Oil (FTO) to buy from hold.
• Boeing (BA) was raised to overweight from equal weight at Barclays.
• Wynn Resorts (WYNN) was upgraded at UBS to buy from neutral.
• Investors Bancorp (ISBC) was upgraded to buy from neutral at Janney Montgomery.

Analyst upgrades:

• Wells Fargo upgraded Qualcomm (QCOM) to outperform from market perform. The firm believes key risks have been eliminated, such as the license dispute with Nokia (NOK) and litigation with Broadcom (BRCM), and thinks Qualcomm is well-positioned for handset unit shipments growth. Wells has a $50 to $60 target range on shares.
• Oppenheimer upgraded Juniper Networks (JNPR) to outperform from perform as it views shares as compelling at current levels and thinks the company is well positioned for 2010. Opco set a $31 price target on the stock.
• FBR Capital upgraded Frontline (FRO) to outperform from market perform after raising its rating on the tanker industry to overweight. The firm raised its target on shares to $33 from $23.
• PetSmart (PETM) was upgraded to buy from neutral at Goldman.
• Career Education (CECO) was upgraded to equal weight from underweight at Barclays.
• Rosetta Resources (ROSE) was upgraded to buy from neutral at SunTrust.

I'm Reiterating my Buy rating for Sunoco, Inc. (NYSE: SUN), first recommended on April 20, 2009 at a price of $26.58, but there are qualifiers, so close attention is warranted. If you bought SUN in April, you're up about 19%.

Sunoco has been hurt by the high oil price/low gasoline demand condition pervasive in the giant U.S. market that's squeezed margins. Further, Sunoco's primarily sweet crude oil refining operation prevents it from capitalizing on larger-margin sour crude refining. However, the sweet focus has enabled SUN to produce larger amounts of higher-grade products.

Sunoco, Inc. (NYSE: SUN) has underperformed, but I'm nevertheless Reiterating my Buy rating for the shares, first recommended on April 20, 2009 at a price of $26.58. Here's why:

Sunoco focuses on refining a relatively high percentage of higher-grade products, but demand has been depressed, due to the recession. Given a likely stabilization in U.S. gasoline demand later in 2009, revenue should rebound, which should send institution investors back into SUN.

Analyst Upgrades

• Wachovia upgraded Choice Hotels (NYSE: CHH) to Outperform from Market Perform based on its high margin franchise, valuation, and brand acquisition opportunities, among other reasons.
• Canaccord upgraded Freeport McMoRan (NYSE: FCX) to Buy from Speculative Buy based on asset and management quality, size, and liquidity, and view as a potential hedge against inflation and U.S. dollar weakness.
• Cowen upgraded Amazon.com (NASDAQ: AMZN) to Outperform from Neutral. The firm expects Amazon to gain more of the consumer wallet as it focuses on lower prices and a superior shopping experience vs. online and offline competitors.
• Ctrip.com (NASDAQ: CTRP) was upgraded to Buy from Neutral at Nomura.
• FedEx (NYSE: FDX) was upgraded to Overweight from Equal Weight at Barclays.
• Marathon Oil (NYSE: MRO) was upgraded to Neutral from Sell at Goldman.

The world is awash in oil. For now. Gasoline prices are at moderate levels. For now. And analysts say slack demand will keep a lid on gasoline prices this summer. Well, as the singer Meatloaf would say, two out of three ain't bad.

Given the continuing U.S. recession (which has taken many drivers off the road), all signs point to moderate gasoline prices for the duration of the summer, unless the unexpected occurs, such as a refinery outage or a damaging hurricane season. At that point gasoline prices could spike and begin to trend higher -- as they so often do in the summer -- exasperating many, unless you've purchased shares in Sunoco (NYSE: SUN).