Goldman Sachs is increasingly bullish on major North American oil companies, including ConocoPhillips (COP) , upgrading the group to Attractive from Neutral because of its free cash flow potential next year.

"We believe our upstream coverage is well positioned to generate more free cash flow in 2018 to 2019 than at any time in recent history given a combination of firm oil prices, above-average downstream margins, increasing production as major projects contribute, the roll off of capital spending and global cost deflation," Goldman Sachs analyst Neil Mehta wrote in a Dec. 13 research note.

Mehta said that the cumulative free cash flow for the oil majors in the US and Canada between 2018 and 2022 at $57 a barrel for Brent, on average, will be higher than the last energy upcycle between 2009 and 2013, when Brent averaged $95 a barrel. The majors refer to a group of multinational oil companies and their size, age or market position. They are typically "integrated" energy companies, with divisions in exploration, production, marketing, refining, transportation and distribution.

One of the companies well positioned to generate positive free cash flow is ConocoPhillips. The firm raised its rating on ConocoPhillips to Buy from Neutral given Goldman's higher 2018 Brent crude oil outlook of $62 a barrel, compared to its previous estimate of $58 a barrel. Mehta also cited the Houston-based company's "free cash flow improvement with capital discipline and underappreciated value in the company's asset base including in the Eagle Ford and Alaska."

Shares of ConocoPhillips rose by 1.5% to $52.49 at 3:30 p.m. EST on Thursday.

The Goldman analyst also highlighted Chevron Corp. (CVX) , Suncor Energy Inc. (SU) and Canadian Natural Resources Limited (CNQ) -- all Buy-rated stocks -- as the other beneficiaries of the positive free cash flow theme.

The firm also upgraded integrated energy company Husky Energy Inc. (HUSKF) to Neutral from Sell ahead of a potential dividend resumption. Mehta also noted that since the Canadian company was added to Goldman's Americas Sell List on June 25, the shares have underperformed its Canadian peers by 15%.

"However, following the release of its 2018 production and capital spend outlook and coupled with an increasingly constructive macro outlook, we see an improving free cash flow profile into the new year, providing us confidence that the return of capital to shareholders is likely an imminent event," the Goldman analyst said.

Separately, Husky was upgraded to Outperform at Raymond James with a $19 price target, and Scotia Capital analyst Jason Bouvier upgraded Husky to Sector Outperform from Sector Perform, setting an $18 price target.

Shares of Husky rose by 1.8% to $12.65 at around 3 p.m. EST.

More of What's Trending on TheStreet:

More from Stocks

Making Sense of the Market: Follow These Trends, Goldman Sachs Says

Making Sense of the Market: Follow These Trends, Goldman Sachs Says

J.C. Penney Bond Market Moves Hint Department Store Retailer Is on Life Support

J.C. Penney Bond Market Moves Hint Department Store Retailer Is on Life Support

Use Extreme Caution as Tesla's Stock Breaks Below This Key Price

Use Extreme Caution as Tesla's Stock Breaks Below This Key Price

Dow Trades Higher, Nasdaq Slides as Chipmakers Fall

Dow Trades Higher, Nasdaq Slides as Chipmakers Fall

Maybe Trump Should Create a One-Day Super Bowl for Corporate Earnings Releases

Maybe Trump Should Create a One-Day Super Bowl for Corporate Earnings Releases