• In the first quarter of 2026, California Resources Corporation reported revenue of US$119 million versus US$912 million a year earlier, swinging from net income of US$115 million to a net loss of US$711 million, yet its board still declared a quarterly dividend of US$0.405 per share payable in June.
• Despite the sharp year-on-year earnings deterioration, the company raised full-year 2026 production guidance and highlighted progress on its carbon capture and storage project at the Elk Hills gas plant, signaling continued investment in both traditional output and low-carbon operations.
• Next, we’ll examine how the upgraded 2026 production guidance and carbon capture progress may reshape California Resources’ broader investment narrative.

Capitalize on the AI infrastructure supercycle with our selection of the 39 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow.

California Resources Investment Narrative Recap

To own California Resources, you need to believe its California oil assets and emerging carbon capture business can together justify the risks of a single-state, capital-intensive operator. The Q1 2026 swing to a US$711 million loss and sharply lower revenue does not change the core near term catalyst, which remains execution on higher 2026 production targets, but it does sharpen the biggest risk around regulatory and permitting delays that could undermine both drilling plans and CCS returns.

The most relevant update is the company’s higher full year 2026 net production guidance of 149,000 to 155,000 Boe per day, despite weak reported earnings. Against a backdrop of tightening regulations and heavy dependence on permits, this guidance keeps operational delivery and volume stability at the center of the story, while progress at Elk Hills on carbon capture is emerging as a secondary, longer dated catalyst that still depends on regulatory approvals and proving commercial demand.

Yet behind the raised production targets, investors should be aware that prolonged California permitting or CCS approval setbacks could...

California Resources' narrative projects $4.0 billion revenue and $464.1 million earnings by 2029. This requires 5.3% yearly revenue growth and about a $101 million earnings increase from $363.0 million today.

Uncover how California Resources' forecasts yield a $81.50 fair value, a 36% upside to its current price.

Exploring Other Perspectives

Optimistic analysts were once projecting revenue of about US$4.5 billion and earnings near US$770 million, so compared with today’s loss and CCS execution risk, their outlook is clearly far more optimistic and you should decide which set of assumptions you are most comfortable with.

Explore 2 other fair value estimates on California Resources - why the stock might be worth just $81.50!

Reach Your Own Conclusion

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your California Resources research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free California Resources research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate California Resources' overall financial health at a glance.

Contemplating Other Strategies?

Don't miss your shot at the next 10-bagger. Our latest stock picks just dropped:

• Find 48 companies with promising cash flow potential yet trading below their fair value.
• Uncover the next big thing with 27 elite penny stocks that balance risk and reward.
• AI is about to change healthcare. These 34 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.

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.