California Resources (CRC) recently completed a private offering of $550 million in 7.250% senior unsecured notes due 2035, using the proceeds to redeem its outstanding 8.250% senior unsecured notes due 2029.

Despite the recent refinancing, California Resources' share price has been under pressure in the short term, with a 30 day share price return down 13.75% and a 90 day share price return down 26.59%. However, the year to date share price return of 8.47% and 1 year total shareholder return of 11.63% suggest that longer term momentum has been more supportive.

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Bulls might see California Resources using cheaper long term debt and carbon projects as a platform for value, while bears point to recent share price weakness and a reported loss. Which case does the current valuation support?

Most Popular Narrative: 38.3% Undervalued

Compared with California Resources' last close at $50.32, the most followed narrative puts fair value at $81.50, framing the recent refinancing against a much higher long term target.

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.

Curious what sits behind that earnings shift for California Resources? The narrative leans heavily on revenue expansion, fatter margins, and a richer future profit multiple. The full set of assumptions is where the story really gets interesting.

Result: Fair Value of $81.50 (UNDERVALUED)

However, for California Resources, the narrative could shift quickly if permitting reforms stall in California or if early carbon capture and storage projects face regulatory delays.

Next Steps

If the mix of optimism and concern around California Resources feels finely balanced, you may want to act now by reviewing the full picture for yourself with 4 key rewards and 3 important warning signs.

Looking for more investment ideas beyond California Resources?

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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.