Citi Resumes California Resources (CRC) at Buy Following Merger

Citi analyst Scott Gruber resumes coverage on California Resources (NYSE: CRC) with a Buy rating and a price target of $63.00.

The analyst comments "We resume coverage of CRC following a period of Rating Suspended with a Buy rating and target price of $63, reflecting a ~3x multiple on 2024E DACF plus a $20/share CMB value, plus a $8/share real estate value. We view the company as well-positioned given line-of-sight into stabilizing oil production next year, a leading position in carbon capture in California and optionality presented by their Elk Hills power plant as data center demand ramps. In particular, securing their first class VI well permit, which appears likely in the months ahead, should provide comfort to the market that commercialization will happen in 2025. Additionally, we publish an updated model to incorporate the Aera acquisition, the 2H24 guidance for the combined company, and Citi’s most recent commodity price deck. We forecast 2q EBITDAX of $146mm, slightly above consensus excluding outliers."

For an analyst ratings summary and ratings history on California Resources click here. For more ratings news on California Resources click here.

Shares of California Resources closed at $52.27 yesterday.

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