Barclays recently upgraded California Resources Corporation (NYSE: CRC) from “Equal Weight” to “Overweight” with a price target raised to $60. The shift reflects growing confidence in the company’s operational resilience and cash flow generation despite California’s complex regulatory climate.
🏗️ CRC’s Q1 2025 results reinforced its value proposition. The company reported an adjusted EBITDAX of $328 million and free cash flow of $131 million, supported by disciplined capital allocation and efficient cost management. These metrics indicate that CRC is not only managing its assets well but also producing consistent shareholder value.
🌿 One key headwind remains the environmental policy landscape in California. Recent court rulings on drilling permits in Kern County have tightened the company’s operational flexibility. However, instead of slowing down, CRC is leaning into innovation, particularly through its carbon management business. With over 1.2 million net mineral acres and deep technical expertise, CRC is positioning itself as a leader in energy transition infrastructure.
💰 On the dividend front, CRC stands out. It currently yields approximately 3.65% with a forward annual dividend of $1.55 per share. The payout ratio is a healthy 43.26%, showing a solid balance between rewarding shareholders and reinvesting in growth. Notably, the dividend increased by over 20% in 2024 and is expected to rise another 11% in 2025, reflecting strong confidence in forward earnings stability.
Barclays’ upgrade suggests a positive long-term outlook based on cash flow visibility, strategic initiatives, and a proactive stance on energy transition—all while navigating California’s regulatory maze.