California Resources (CRC) drew fresh investor attention after reporting second quarter 2026 earnings, with revenue of US$1,297 million and net income of US$514 million, compared with US$978 million and US$172 million a year earlier.

Despite the strong second quarter results, California Resources’ recent share price has lost some momentum, with a 90 day share price return of 12.73% and a year to date share price return of 12.27%. However, the 5 year total shareholder return of 100.12% points to a very different long term picture.

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California Resources now trades at US$52.08 while analyst targets and intrinsic value estimates sit much higher. Does that gap point to mispricing, or does the recent run already reflect what the business is worth?

Most Popular Narrative: 33% Undervalued

Based on the most followed narrative, California Resources is compared to a fair value of $77.55 against a last close of $52.08, which frames the current discount and the assumptions behind it.

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 is built into that CCS story and long term earnings view. The narrative leans on steady top line growth, sharply higher margins, and a valuation multiple that sits below many peers. Curious which specific profit and revenue path needs to play out for that fair value to stack up.

Result: Fair Value of $77.55 (UNDERVALUED)

However, investors in California Resources still need to watch for extended permitting delays or higher well closure costs, as these could pressure future production, cash flow, and CCS returns.

Next Steps

With both risks and rewards in play for California Resources, sentiment is clearly mixed. It helps to move quickly and review the full picture for yourself. To weigh up both sides in one place, start with these 4 key rewards and 3 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.