Mizuho Securities analyst Nitin Kumar CFA has maintained their bullish stance on CRC stock, giving a Buy rating on March 11.
Nitin Kumar CFA has given his Buy rating due to a combination of factors, including California Resources Corp’s (CRC) expected increase in free cash flow (FCF) and the valuation of their Proved Developed Producing reserves. Despite an appellate court upholding a ban on new permits in Kern County, which affects CRC’s operational plans, the financial outlook remains positive. The company’s conservative capital plan is anticipated to boost free cash flow by approximately $50-70 million in 2024, assuming Brent crude oil remains at $80 per barrel. This increase in FCF, alongside the value of CRC’s reserves, supports the analyst’s positive perspective on the stock.
Moreover, the analyst’s NAV-based price target adjustment to $63, down from $69, factors in the company’s long-term strategy and the expected closure of the Aera deal, which would contribute to full-year volumes. Despite not accounting for longer-dated inventory beyond 2033, the NAV valuation includes significant contributions from Proved Developed Producing reserves, Aera PDP reserves, and undeveloped inventory scheduled for drilling over the next decade. The estimated FCF for 2024 and 2025, along with CRC’s favorable trading valuation compared to its peers, further bolsters the Buy rating.
In another report released on March 11, Roth MKM also maintained a Buy rating on the stock with a $56.00 price target.
CRC’s price has also changed slightly for the past six months – from $55.410 to $56.080, which is a 1.21% increase.
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California Resources Corp (CRC) Company Description:
California Resources produces oil and natural gas in California. At the end of 2018, the company reported net proved reserves of 618 million barrels of oil equivalent. Net production averaged 132 thousand barrels of oil equivalent per day in 2018 at a ratio of 75% oil and natural gas liquids and 25% natural gas.
Read More on CRC:
- California Resources price target lowered to $68 from $72 at Stifel
- California Resources price target lowered to $63 from $69 at Mizuho
- California Resources management to meet with Roth MKM
- California Resources price target lowered to $56 from $58 at Roth MKM
- California Resources price target lowered to $65 from $70 at RBC Capital
