Trump announces 100% chip tariff as Apple ups U.S. investment
On Wednesday, Truist Securities expressed continued confidence in California Resources Corporation (NYSE:CRC) by maintaining a Buy rating and a $75.00 price target on the stock, representing significant upside from the current price of $39.17. The target aligns with the broader analyst consensus, with price targets ranging from $55 to $80. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value model. Truist Securities’ stance comes amidst the company’s efforts to establish a robust operational model aimed at delivering power and managing emissions effectively.
California Resources has been focusing on creating a foundation that will allow it to efficiently generate power, reduce emissions, and provide carbon-free data. With a solid gross profit margin of 54% and operating with moderate debt levels, the company appears well-positioned for expansion. Truist Securities anticipates that California Resources is on the brink of securing a significant data center contract that will leverage the company’s comprehensive capabilities.
The upcoming contract is expected to offer considerable upside potential and will likely benefit from the company’s solid financial position. Truist Securities believes that California Resources’ strong balance sheet will support the necessary services required for any data center agreement. The company has demonstrated its commitment to shareholder returns with a 25% dividend growth and a current yield of 3.96%. InvestingPro subscribers can access detailed financial health scores and 10+ additional ProTips that provide deeper insights into CRC’s investment potential.
California Resources’ recent stock price performance, which has not met expectations, is viewed by Truist Securities as unwarranted. The analysts at Truist Securities argue that the company has proactively addressed issues that could negatively affect its stock value.
In summary, Truist Securities reasserts its $75 price target for California Resources, signaling a vote of confidence in the company’s strategic initiatives and its potential for future growth. The firm’s analysts underscore the company’s readiness to handle the demands of a full-scale data center contract and its commitment to maintaining strong shareholder returns.
In other recent news, California Resources Corporation reported its fourth-quarter 2024 earnings, which did not meet analyst expectations. The company posted an earnings per share (EPS) of $0.91, falling short of the anticipated $0.9898, and reported revenue of $877 million, below the forecasted $908.46 million. Despite this, the company highlighted progress in carbon capture and storage initiatives and returned approximately 85% of its 2024 free cash flow to shareholders. Barclays (LON:BARC) analyst Betty Jiang revised the price target for California Resources, lowering it to $55 from $57, while maintaining an Equalweight rating, noting the company’s recent update as "overall solid." California Resources’ capital expenditures were reported to be significantly below expectations, by 9% and 18% compared to Barclays’ and the broader market’s forecasts, respectively. Looking ahead, the company expects adjusted EBITDAX for 2025 to range between $1.1 billion and $1.2 billion and plans to expand its drilling operations. Barclays also noted a concern regarding a deferred payment from a joint venture with Brookfield, which depends on securing contracts for more than 35% of the annual storage capacity at its carbon storage vault. Despite these challenges, California Resources remains focused on reducing debt and expanding its carbon management efforts.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.