California Resources (CRC) has reached first carbon dioxide injection at its Carbon TerraVault I project in Elk Hills Field, Kern County, creating California’s first operational carbon capture and storage hub for industrial emitters.

The first CO2 injection comes as the share price has eased 4.2% over the past month but is still up 33.7% year to date, with a 1 year total shareholder return of 50.1% suggesting momentum has been building over a longer horizon.

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With the stock up 33.7% year to date and trading below analyst targets and certain intrinsic value estimates, the key question is whether CRC is still undervalued or if the market is already pricing in future growth.

Most Popular Narrative: 23.9% Undervalued

Analysts following the most popular narrative see fair value at $81.50 per share compared with the last close at $62.04, framing CRC as materially undervalued on their numbers.

The company's advanced progress and upcoming operational launch of California's first CCS project, alongside legislative support for CO2 pipelines and clean power procurement, positions CRC to capture meaningful new, high-margin revenue streams from carbon management services, boosting long-term earnings and margins.

Want to see what sits behind that optimism on earnings and margins? The narrative leans on steady revenue growth, rising profitability and a richer future earnings multiple. The precise mix of these drivers is where the story gets interesting.

Result: Fair Value of $81.50 (UNDERVALUED)

However, you also need to factor in the risk that California permitting remains tight and CCS projects face delays or weaker demand, which would challenge this thesis.

Next Steps

With mixed sentiment around CRC's risks and rewards, it makes sense to act promptly, review the data for yourself, and weigh the trade off using our 4 key rewards and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.