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Investing.com - Mizuho raised its price target on California Resources (NYSE:CRC) to $71.00 from $65.00 on Monday, while maintaining an Outperform rating on the stock. The company, currently trading at $56.90, is showing momentum with shares trading near their 52-week high of $60.41. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation.
The price target increase follows California Resources’ announcement of an all-stock acquisition of Berry Corporation for approximately $717 million. Mizuho views the combination as positive, noting the deal includes approximately $85 million in annualized synergies. With a market capitalization of $4.8 billion and strong financial health score of "GREAT" from InvestingPro, the company appears well-positioned to execute this acquisition. InvestingPro subscribers have access to 8 additional key insights about CRC’s growth potential.
The acquisition is expected to be accretive to California Resources, with Mizuho projecting approximately 24% accretion to 2026 free cash flow per share and 17% accretion to cash flow per share, driven by a higher oil mix from the Berry assets.
Mizuho also highlighted recent regulatory developments in California, including the passage of SB237 regarding Kern County permitting and AB881 concerning CO2 pipelines. The firm has included approximately $450 million in value for CRC’s carbon management business (CTV), representing about 20% of its unrisked value for announced storage projects and deals.
The firm believes the Berry acquisition strengthens California Resources’ legacy oil and gas business, while the regulatory progress supports development of the company’s carbon management segment.
In other recent news, California Resources Corporation reported its second-quarter 2025 earnings, significantly surpassing analyst expectations. The company achieved an earnings per share of $1.10, compared to the anticipated $0.90, and reported revenues of $978 million against the forecasted $784 million. This positive earnings report highlights the company’s strong financial performance. Meanwhile, UBS reiterated a Buy rating on California Resources, citing the passage of SB-237 by the California Legislature as a beneficial development for the company. BofA Securities also raised its price target for California Resources to $60, maintaining a Buy rating, as state officials promote legislation to revive oil and gas permitting. Mizuho increased its price target to $64, emphasizing capital efficiencies and regulatory pathways as factors for value creation. Texas Capital Securities reiterated its Buy rating on Berry Petroleum, noting the draft legislation as a significant positive for both Berry Petroleum and California Resources. These developments indicate a growing confidence among analysts in the potential of California Resources.
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