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Cenovus Energy's Pelican Lake facility.

Some analysts and investors are getting giddy over beaten-up energy stocks, now that oil has come off its highs for the year. The latest: Greg Pardy, an analyst at RBC Dominion Securities, upgraded his recommendation on Cenovus Energy Inc. - the oil producer recently hived off natural gas producer Encana Corp. - to "outperform" from "sector perform" after a 15 per cent pullback in the price. He maintained a 12-month price target of $42.

"Although Cenovus' premium valuation has certainly given us pause in the past, we continue to like its long-term oil sands growth profile and admire its best-in-class in-situ assets at Foster Creek and Christina Lake," Mr. Pardy said in a note.

Since the end of April, the price of crude oil has been in sharp decline, falling 15.6 per cent. It hovered at around $96 (U.S.) a barrel on Tuesday in late-morning trading.

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Canadian energy stocks within the S&P/TSX composite index have actually outperformed the commodity: They have tumbled a total of 11.8 per cent, but began their descent earlier - at the start of March. Suncor Energy Inc. has fallen 17.3 per cent since then. And Canadian Oil Sands Ltd. has fallen 12.3 per cent since early April.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

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