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Investing.com - JPMorgan upgraded California Resources (NYSE:CRC) from Neutral to Overweight and raised its price target to $63.00 from $60.00, citing undervaluation on a sum-of-the-parts basis. This assessment aligns with InvestingPro’s analysis, which indicates CRC is currently undervalued, while maintaining a "GREAT" overall financial health score.
The investment bank estimates the fair value of CRC stock at $63 per share, representing over 30% upside from current levels, based solely on the company’s proved developed producing (PDP) assets minus net debt, without factoring in undeveloped reserves or non-exploration and production businesses. The company’s strong fundamentals include an attractive PEG ratio of 0.14 and an 18% return on equity, according to InvestingPro data.
JPMorgan values California Resources’ non-PDP assets—including Carbon Management, the Elk Hills Power Plant, and Huntington Beach real estate—at approximately $16 per share, providing additional upside potential beyond the core oil and gas operations.
The firm identified several catalysts for the second half of 2025 that could drive further value creation, including the expected first injection of CO2 from CRC’s Carbon Management Business, potential passage of California Assembly Bill 881 allowing CO2 pipeline construction, possible restart of drilling permit approvals, and a potential power purchase agreement at the Elk Hills Power Plant.
JPMorgan also noted signs that California’s regulatory environment for oil and gas producers may be easing, pointing to the California Energy Commission’s recommendation to stabilize in-state oil production in response to an April 2025 letter from Governor Newsom—a development that would benefit CRC as the state’s largest oil producer. With a market capitalization of $4.24 billion and moderate debt levels, the company appears well-positioned to capitalize on these regulatory developments.
In other recent news, California Resources Corporation reported a strong financial performance for the first quarter of 2025, surpassing market expectations with earnings per share of $1.07 and revenue of $912 million. These results exceeded analyst forecasts and have contributed to a positive outlook for the company. California Resources also announced a significant share repurchase, buying back 4.95 million shares from IKAV for approximately $227.7 million, which is part of its $1.35 billion Share Repurchase Program. This transaction will result in changes to the company’s board representation as IKAV’s ownership falls below 5%.
Additionally, several investment firms have adjusted their price targets for California Resources. UBS raised its target to $58, citing a strong first quarter and a positive outlook for the company’s business model. Mizuho (NYSE:MFG) increased its target to $61, anticipating a 30% free cash flow beat in the upcoming quarter. Barclays (LON:BARC) also upgraded the stock to Overweight, with a new price target of $60, highlighting favorable regulatory developments and potential growth in the carbon management sector. These recent developments reflect growing investor confidence in California Resources’ strategic initiatives and financial health.
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