Shares of Occidental Petroleum (OXY - Get Report) jumped almost 3% Thursday after releasing first quarter earnings, which showed better cash flow generation and strong underlying earnings despite a net earnings loss. Its shares were trading relatively flat to up in midday trading on Friday.

Have shares of the Houston oil and gas company become too dear? Some analysts think so, although they're not going so far as to put sell ratings on the stock.

Jefferies  analyst Jason Gammel wrote in a report released Friday that Occidental has astutely managed its financial profile for as long as the firm has covered the stock and its strong balance sheet and spending flexibility should be defensive in the current low price environment. However, he notes the company is trading at 11.9 times enterprise value to discounted cash flow based on his estimates for next year - a 42% premium over its global peers and within 5% of Exxon Mobil (XOM). "That defensiveness comes at a price," he said.

Gammel notes that the company's cash generation was strong in the first quarter -- $822 million, $323 million over his estimate -- despite that the fact the company missed analysts' earnings per share expectations, partly because of worse results in its midstream, or infrastructure, segment.

The analysts said the company is reallocating capital toward longer cycle enhanced oil recovery projects -- which have a one- to two-year lag time and thus would benefit if oil prices are higher by then -- and away from short-term activity in West Texas' and New Mexico's Permian basin. As a result, he expects the company's production to sequentially decline modestly in the second half of this year.

Gammel said the main risks to owning the stock, besides those related to commodity prices, are execution in its Permian Basin unconventional drilling program and the sell-down or outright sale of its businesses in the Middle East and North Africa region. He has a hold on the stock with a price target of $69.

Guy Baber, an analyst at Piper & Jaffray & Co.'s Simmons & Co. International, said he is cognizant of the many positives Occidental offers investors (particularly those who think oil prices will rise slower than others expect), including a solid balance sheet, a more sustainable and resilient business model than most of its peers (highlighted by above average cash flow generation potential) and a robust dividend (4% yield). But he remains neutral on the stock considering its "premium" valuation with a $68 price target.

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