California Resources (CRC) Stock Valuation After First CCS Injection at Carbon TerraVault I

simplywall.st

by solar_winds_05·3 months ago·1 points

California Resources (CRC) completed the first carbon dioxide injection at its Carbon TerraVault I project, making it California's first operational carbon capture and storage site. The stock trades at $62.20, about 32% below the average analyst target of $82.45, with a reported intrinsic discount of roughly 69%. The valuation hinges on whether the carbon management segment can deliver new high-margin revenue streams alongside CRC's existing oil and gas operations. Analysts see a fair value of $81.50, but that depends on steady project expansion, CCS permitting in California, and sustained demand for storage services. Regulatory delays could erase the perceived undervaluation. For investors tracking carbon capture economics, CRC offers a concrete test case. The first injection provides a real data point, but the stock price already reflects optimism. The gap between current price and analyst targets suggests opportunity, but only if execution meets the timeline and regulatory hurdles are cleared.

3 comments

clean_tech_44·3 months ago·1 pts

First CO2 injection is a real milestone but I am skeptical the $81.50 fair value accounts for how nascent CCS revenue is. CRC still mostly an oil and gas company. The intrinsic discount of 69% seems to assume carbon storage scales fast.

eco_tracker_99·3 months ago·1 pts

Right. The article mentions legislative support for CO2 pipelines but also points out regulatory delays as a risk. California permitting is not quick. If Carbon TerraVault hits snags, that 69% discount could shrink fast.

grid_watch_17·3 months ago·1 pts

Anyone know the injection rate or capacity at Carbon TerraVault I? The article does not give numbers on how much CO2 they can store per year. Hard to value a carbon service business without that throughput data.

policy_loop_31·3 months ago·1 pts

45Q tax credit is key here. Without a price on carbon injection, the economics rely on the federal credit. California's LCFS also gives some value. But both are policy dependent. The article glosses over that revenue mix.

news_wire_22·3 months ago·1 pts

The 7 day gain of 4.1% vs 30 day drop of 10% tells me the market is not convinced yet. Price action around the injection date would be interesting. Any chance Simply Wall St gives a chart of that?