A new Goldman Sachs report upgrades Suncor Energy (SU.TO) to Conviction buy from Buy and recommends investors buy Husky Energy (HSE.TO) and sell Imperial Oil (IMO.TO).

Suncor’s shares trade at an attractive discount, says Goldman analyst Neil Mehta in a note to clients. Goldman says Suncor stock could hit a target price of US$38 per share.

The company’s shares have been under pressure lately after the company’s Mildred Lake facility experienced an explosion and fire that triggered an evacuation. Investors are also nervous about the potential impact of a U.S. border tax that could drive up the costs Canadian oil exports. “We see concerns around a potential border adjustment tax risk and the unplanned Syncrude outage as overstated,” said Mehta.

Goldman Sachs is also encourage by Suncor’s strong history of dividend growth and share buyback and could also see strong potential growth from its Fort Hills and Hebron projects.

Goldman is also bullish on Husky Energy. The company’s shares have fallen dramatically since the crash in energy prices. Many investors abandoned the stock after it suspended its dividend in 2015. Goldman expects Husky to resume its dividend in the first half of this year, says the report.

Goldman has downgraded its outlook for Imperial Oil to sell. The company’s stock is fully valued and is exposed to the differential between the benchmark West Texas Intermediate (WTI) and Canada’s Western Canadian Select (WCS) oil price. Every US$1 change in WTI-WCS impacts cash flow by 3 per cent, says Goldman.

Goldman says its outlook for crude oil is “lower for longer” and expects oil prices to remain between US$50-55 per barrel between 2018-2020. In the near term, Goldman sees global demand outstripping supply, which could lead to more oil inventory drawdowns and push the price of crude to US$57.50 per barrel by the middle of the year and average about US$55 per barrel in the second half of 2017.