Update shared on17 Sep 2025
Fair value Decreased 14%Analyst price targets for Berry have been revised down from $4.44 to $3.84 as initial optimism over cost synergies and operational alignment from the California Resources acquisition is tempered by concerns over deal valuation and the diminished standalone upside for Berry.
Analyst Commentary
- Bullish analysts highlight that the announced acquisition of Berry by California Resources is strategically logical given the asset overlap and adjacency in California, supporting operational integration.
- The transaction is expected to be more than 10% accretive to California Resources’ cash flow per share and free cash flow per share before synergies, strengthening the combined entity's financial profile.
- There is potential for synergies from the deal to exceed current guidance ($80M-$90M within the first year), given Berry’s cost structure and cash G&A levels.
- The recent passage and draft of California legislation (SB 237) is anticipated to streamline the permitting process for new wells and reduce legal uncertainty, benefiting both Berry and California Resources operationally.
- Bearish analysts are cautious, reflected in a downgrade to Hold and a $4 price target for Berry, likely due to deal valuation, relative upside limitations, or uncertainty regarding the acquisition’s impact on Berry’s standalone business.
What's in the News
- California Resources Corporation agreed to acquire Berry Corporation for approximately $310 million in equity, plus $408 million in assumed net debt, valuing Berry at around $717 million; deal completion expected in Q1 2026, subject to regulatory and shareholder approval.
- Berry Corporation repurchased no additional shares in Q2 2025, concluding its buyback program with 11,949,247 shares repurchased (15.79%) for $113.73 million.
- Production guidance for 2025 reaffirmed, with average daily production expected in the range of 24,800 to 26,000 boe/d.
- Q2 2025 production reported at 23.9 MBoe/d (92% oil), in line with plan but below 25.3 MBoe/d year-over-year.
- Berry Corporation was dropped from multiple Russell growth indices, including Russell 2000, 2500, 3000, Small Cap, and Microcap Growth benchmarks.
Valuation Changes
Summary of Valuation Changes for Berry
- The Consensus Analyst Price Target has significantly fallen from $4.44 to $3.84.
- The Future P/E for Berry has significantly fallen from 19.85x to 17.03x.
- The Discount Rate for Berry has fallen slightly from 9.39% to 9.08%.
Disclaimer
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