California Resources Corporation Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, California Resources Corporation (NYSE:CRC) recently reported its second-quarter numbers. Statutory earnings per share disappointed, coming in -88% short of expectations, at US$0.11. Fortunately revenue performance was a lot stronger at US$514m arriving 10% ahead of predictions. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for California Resources

After the latest results, the five analysts covering California Resources are now predicting revenues of US$2.93b in 2024. If met, this would reflect a sizeable 30% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 165% to US$4.87. In the lead-up to this report, the analysts had been modelling revenues of US$2.84b and earnings per share (EPS) of US$4.85 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of US$61.14, implying that the uplift in revenue is not expected to greatly contribute to California Resources's valuation in the near term. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic California Resources analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$55.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting California Resources' growth to accelerate, with the forecast 68% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that California Resources is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$61.14, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on California Resources. Long-term earnings power is much more important than next year's profits. We have forecasts for California Resources going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 4 warning signs for California Resources that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.