California Resources (CRC): A Fresh Look at Valuation After Launching California’s First Carbon Capture Project

California Resources (CRC) just broke ground on Carbon TerraVault I, the state’s first carbon capture and storage project. The project stands out as a strategic move for CRC and is drawing both regulatory and industry interest.

See our latest analysis for California Resources.

The Carbon TerraVault milestone and CRC’s recent $400 million senior notes offering have not yet sparked a renewed uptrend, as the stock delivered a 1-year total shareholder return of -4.7% and is still down about 9% for the year to date. The short-term price momentum remains muted, but longer-term investors have seen a 17% total return over three years. Foundational shifts like CTV I could help turn sentiment if execution remains on track.

If CRC’s focus on energy transition projects has you interested in other up-and-coming opportunities, it might be the perfect moment to discover fast growing stocks with high insider ownership

With the shares still lagging despite new growth initiatives, the key question for investors is whether California Resources is trading at a discount because of market skepticism, or if the stock already reflects all future upside.

Most Popular Narrative: 28% Undervalued

California Resources' most widely followed narrative puts fair value at $65.64, well above the last close of $47.28. This sets a bullish stage as analyst forecasts are seeing potential far beyond the current stock price, driven by bold future assumptions.

Recent and potential regulatory reforms in California aimed at improving oil and gas permitting and supporting local energy security may provide CRC with increased operational flexibility and access to its extensive project inventory. This could unlock higher production volumes and drive top-line revenue growth. The company's advanced progress and upcoming operational launch of California's first CCS project, alongside legislative support for CO2 pipelines and clean power procurement, positions CRC to capture meaningful new, high-margin revenue streams from carbon management services, boosting long-term earnings and margins.

Read the complete narrative.

Want to see what’s fueling this Wall Street optimism? The driver isn’t just energy transition hype. There are unconventional margin moves and striking assumptions about future revenues behind the narrative’s strong upside. The numbers might surprise you. Discover what really underpins the valuation rethink.

Result: Fair Value of $65.64 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent regulatory delays or unexpected declines in production could challenge this optimistic outlook and serve as significant headwinds for the current narrative.

Find out about the key risks to this California Resources narrative.

Build Your Own California Resources Narrative

If you want to dig deeper and form your own view, the data and tools are there so you can craft a personal narrative in just a few minutes. Do it your way

Prefer to form your own view? Our platform makes it easy to explore a stock's fundamentals and create your own narrative in minutes.

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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.

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