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Upbeat on Suncor Add to ...

Suncor Energy Inc. was left out of Monday's stock market rally, and it was down again on Tuesday, falling 7.2 per cent one day after it unveiled a plan to buy Petro-Canada in a $19-billion deal.

However, Andrew Potter, an analyst at UBS, is now more bullish on the stock. He raised his 12-month target price to $42 from $39, while maintaining a "buy" recommendation.

"While Suncor paid a relatively steep premium, it is worth noting that the price paid remained in-line with our net asset value estimate for Petro-Canada using $55 (U.S.) a barrel oil price," Mr. Potter said in a note. "Additionally, we estimate the transaction as being approximately 10 per cent accretive to Suncor's net asset value using a 10 per cent discount."

At midday on Tuesday, Suncor shares traded at $28.52 in Toronto, down $2.22.


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