California Resources (CRC): Valuation Update Following Carbon Capture Agreement, Earnings Release, and New Guidance

California Resources, a key player in the energy sector, just unveiled a series of updates that caught investors’ attention. The company entered a Memorandum of Understanding for carbon capture services, released quarterly earnings, and provided fresh guidance for the coming months.

See our latest analysis for California Resources.

California Resources’ recent momentum is grounded in meaningful events, from announcing the carbon management partnership to boosting its credit facility and reaffirming production guidance. Despite these headlines, the stock’s share price return for the year is down 7.6%, and the one-year total shareholder return sits at -15%. Its five-year figure still reflects robust long-term growth.

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With analyst price targets well above current levels and mixed signals from recent earnings, the big question emerges: Is California Resources trading at a compelling discount, or are investors already factoring in all of its future prospects?

Most Popular Narrative: 26.7% Undervalued

With the current narrative placing California Resources' fair value at $65.64, there is a significant gap compared to its last close at $48.08. This valuation reflects a notably bullish outlook despite recent declines in profitability and forecasts of lower future earnings.

CRC's cost discipline, demonstrated by ahead-of-schedule merger synergies and sustained reductions in operating expenses, amplifies free cash flow, elevates net margins, and supports continued significant capital returns (buybacks/dividends). This sets up future EPS and cash flow per share growth.

Read the complete narrative.

What is the secret behind this striking valuation call? The narrative hinges on bold capital return assumptions, aggressive buybacks, and a future profit multiple usually seen in fast-growing industries. There is much more below the surface—are you ready to discover which financial forecasts power this outlook?

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 hurdles and escalating environmental liabilities could quickly reverse sentiment. These challenges may affect even the most robust long-term outlooks for California Resources.

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

Build Your Own California Resources Narrative

If you see the story differently or want to dig into the numbers on your own terms, you can build your own view in minutes. Do it your way

A great starting point for your California Resources research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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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