Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - Mizuho (NYSE:MFG) raised its price target on California Resources (NYSE:CRC) to $61.00 from $60.00 on Monday, while maintaining an Outperform rating on the stock. The company, currently trading at $47.85, shows signs of being undervalued according to InvestingPro analysis, with a P/E ratio of 8.1x and an attractive EV/EBITDA of 3.76x.
The price target increase follows the firm’s expectation of a 30% free cash flow beat versus consensus estimates for the upcoming quarter, though EBITDAX is anticipated to be broadly in line with market expectations. The company maintains a strong financial health score of 3.15/5 on InvestingPro, with a notable free cash flow yield of 11%.
Mizuho noted that California Resources’ recent repurchase of 4.95 million shares from IKAV at $46 per share, totaling approximately $228 million and settled on June 25, 2025, had an estimated $1 positive impact on net asset value per share, driving the price target adjustment. The company also offers shareholders a 3.24% dividend yield, having raised its dividend for four consecutive years.
The firm highlighted that investor focus will likely center on updates regarding the company’s 26R carbon capture and storage project, including sequestration economics and additional volumes for the project.
Mizuho also identified two key regulatory developments that could impact California Resources: the CO₂ pipeline legislation in California, expected to reach the Governor’s office by October 12, and a court ruling on Kern County exploration and production permitting anticipated by fall 2025.
In other recent news, California Resources Corporation reported impressive financial results for Q1 2025, surpassing market expectations. The company achieved an earnings per share of $1.07, significantly higher than the projected $0.8357, and generated revenue of $912 million, exceeding the anticipated $862.22 million. Additionally, California Resources announced the repurchase of 4.95 million shares from IKAV Impact S.a.r.l. for $227.7 million, which will alter board representation due to IKAV’s reduced ownership. Barclays (LON:BARC) analyst Betty Jiang upgraded the company’s stock rating from Equalweight to Overweight, raising the price target to $60.00, citing a favorable regulatory environment and untapped asset value. The company’s strategic initiatives, including the launch of California’s first Carbon Capture and Storage project, are seen as significant moves. California Resources returned $258 million to stakeholders through dividends and buybacks, demonstrating robust cash flow management. The company also maintains over $1 billion in liquidity, positioning it well for future opportunities. These developments reflect a positive outlook for California Resources, supported by strong financial and operational performance.
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