NEW YORK (CNNMoney.com) -- After rebounding sharply from a 14-year low in June, BP's stock can no longer be considered a bargain.
Shares of the London-based oil giant have rallied some 40% over the last three weeks amid speculation the ruptured well in the Gulf of Mexico will be brought under control soon.
The stock was down 3.6% to $37.52 on Friday. But the strength of the recent rebound has prompted some analysts to say the time to buy BP has passed.
"The stock is no longer what we would consider particularly cheap," said Pavel Molchanov, an analyst at Raymond James, adding that BP is now trading at comparable valuations to other oil companies, such as ExxonMobil (XOM, Fortune 500) and Hess Corp. (HES, Fortune 500)
To be sure, the worst for BP is far from over and its stock remains vulnerable.
Even with the recent rebound, BP shares are still below the levels seen before the Deepwater Horizon disaster occurred on April 20.
At that time, BP was trading around $60 per share. Last month, it fell to a 14-year low of $27 a share amid uncertainty about the cost of the spill and fears the company could be forced to declare bankruptcy.
But shares jumped 7% on Thursday after oil stopped flowing from the broken well for the first time in nearly three months. The well remained shut Friday as BP monitored pressure readings as part of an ongoing "integrity test."
BP executives stressed that oil could resume leaking if the test results suggest that the well bore has been compromised. But company and government officials welcomed the pause as an encouraging sign.
"There was a piece of legitimately good news yesterday, even if it's temporary," said Molchanov, adding that investors are expecting BP to announce other positive developments soon, including the completion of a relief well and possible asset sales.
Still, Molchanov and other analysts said BP faces significant long-term challenges.
"They're not out of the woods yet," said Fadel Gheit, an analyst at Oppenheimer & Co. "The easy part is over, the difficult part is yet to come."
Gheit said shutting in the well Thursday demonstrated that BP has the best technology of any company in the industry. But he said lingering concerns about the financial fallout of the spill continue to weigh on the stock price.
"Investors are not worried about technology, they're worried about money," he said.
Gheit estimates that BP could face liability costs of $60 billion, which he said BP could handle "without really destroying its asset base or changing the company dramatically."
BP has pledged to set aside $20 billion in an independently managed escrow fund to pay spill related liabilities. The company has also suspended its quarterly dividend payments, which totaled $10.5 billion last year.
But much uncertainty remains about the ultimate cost of the spill and whether BP will be able to fully recover from the disaster.
In addition to cleanup and liability costs, BP could face significant government penalties if it is found guilty of criminal negligence.
The company could also come under increased scrutiny from regulators in the United States and abroad, hindering its ability to grow.
"BP's reputation as a safe and responsible operator has been damaged," said Molchanov. "The legal and political context that BP will be operating in for many years to come is going to be substantively tough."