CRC: Carbon Capture Progress And Shareholder Returns Will Support Steadier Outlook

Analysts have raised their price target on California Resources by approximately 8 percent, to about $52 per share from roughly $48, citing expectations for moderating revenue declines and a slightly lower future valuation multiple, despite some near term margin compression.

What's in the News

• The company completed its multi-year share repurchase program, retiring 26.3 million shares, or about 33% of shares outstanding, for roughly $1.15 billion under the buyback announced in May 2021 (company buyback update).
• The company issued fourth quarter 2025 guidance calling for consolidated net production between 131 and 135 MBoe per day, with oil making up about 78% of volumes, and projected net income of $15 million to $27 million (company guidance).
• The company raised its quarterly cash dividend to $0.405 per share, payable December 15, 2025 to shareholders of record on December 1, 2025 (company dividend announcement).
• The company signed a memorandum of understanding with Capital Power to evaluate carbon capture and sequestration solutions for the 1.1 GW La Paloma natural gas plant in Kern County, potentially transporting and sequestering up to 3 million metric tons of CO2 per year through Carbon TerraVault, subject to permitting and final investment decisions (company MOU announcement).

Valuation Changes

• The fair value estimate increased moderately, rising from approximately $48.08 per share to about $51.83 per share.
• The discount rate edged higher, moving from roughly 6.63 percent to about 6.96 percent, reflecting a slightly higher perceived risk profile.
• The revenue growth outlook improved meaningfully, with the expected annual decline narrowing from about 5.8 percent to roughly 1.3 percent.
• The net profit margin forecast decreased notably, falling from around 6.8 percent to about 4.1 percent.
• The future P/E multiple assumption was reduced modestly, moving from roughly 33.7x earnings to about 30.6x earnings.