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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."

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

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