California Resources Corporation (NYSE:CRC) just released its third-quarter report and things are looking bullish. Statutory earnings performance was extremely strong, with revenue of US$1.4b beating expectations by 37% and earnings per share (EPS) of US$3.78, an impressive 161%ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the seven analysts covering California Resources are now predicting revenues of US$3.44b in 2025. If met, this would reflect a major 33% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to nosedive 30% to US$4.06 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$3.39b and earnings per share (EPS) of US$4.61 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$65.30, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic California Resources analyst has a price target of US$73.00 per share, while the most pessimistic values it at US$57.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting California Resources is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting California Resources' growth to accelerate, with the forecast 26% annualised growth to the end of 2025 ranking favourably alongside historical growth of 5.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that California Resources is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple California Resources analysts - going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for California Resources (1 doesn't sit too well with us) you should be aware of.
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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.
