Investing.com -- Raymond James downgraded Occidental Petroleum Corporation (NYSE: OXY ) to "Outperform" from "Strong Buy" while it also lowered its price target by$17 to $64 given the weaker oil prices and the recent stock outperformance relative to peers.

While Occidental delivered a solid fourth-quarter performance, beating consensus earnings estimates by approximately 18%, the company’s relative strength in the face of sector-wide declines has the analyst a more cautious stance.

Occidental shares have gained around 13% over the past month, making it one of the few oil stocks still in positive territory during the recent sell-off.

Raymond James projects Occidental’s total production to reach approximately 1.39 million barrels of oil equivalent per day (Mboe/d) in the first quarter of 2025, in line with company guidance and consensus estimates.

Capital expenditures for the quarter are expected to be around $1.91 billion, about 2% below the Street’s prior forecast of $1.95 billion.

For full-year 2025, the firm estimates production will grow about 7% year-over-year to 1.415 Mboe/d, while capital spending is projected to be $7.5 billion. Free cash flow yield (FCF/EV) is estimated at roughly 6% for the year.

Raymond James also highlighted Occidental’s recent debt reduction and asset sales. The company met its $4.5 billion near-term debt repayment target in the fourth quarter and announced $1.2 billion in upstream asset divestitures in the first quarter of 2025.

These divestitures included 15 Mboe/d of production from non-core assets in the DJ and Permian basins.

On the operational front, Occidental expects continued efficiency gains in its recently acquired CrownRock assets. The company anticipates a 7% reduction in well costs and a 10% improvement in time-to-market in 2025, potentially saving over $1 million per well in its Midland Basin program.

Raymond also James noted Occidental’s ongoing environmental liability concerns. In December, the company received an unfavorable federal court ruling related to a superfund clean-up site, increasing its potential exposure by $925 million.

Occidental has filed an appeal, and the company expects any remediation costs to be spread over 10-20 years.