California Resources Corporation (CRC) shares soared 6.3% in the last trading session to close at $56.33. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.9% gain over the past four weeks.
A surge in California Resources' stock price can be attributed to its announced all-stock combination with Berry Corporation, which is immediately accretive to key financial metrics and strengthens CRC’s portfolio. The merger promises significant annual synergies of $80-90 million within a year, a stronger balance sheet with low leverage, and enhanced free cash flow, all supporting long-term shareholder value. The transaction also benefits from a favorable regulatory environment in California, adding to investor optimism and driving the stock price higher.
This company is expected to post quarterly earnings of $1.42 per share in its upcoming report, which represents a year-over-year change of -5.3%. Revenues are expected to be $872.27 million, down 35.5% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For California Resources, the consensus EPS estimate for the quarter has been revised 19.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on CRC going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
California Resources is part of the Zacks Oil and Gas - Exploration and Production - United States industry. W&T Offshore (WTI), another stock in the same industry, closed the last trading session 0.6% higher at $1.74. WTI has returned 0.6% in the past month.
W&T's consensus EPS estimate for the upcoming report has changed -20.8% over the past month to -$0.15. Compared to the company's year-ago EPS, this represents a change of +11.8%. W&T currently boasts a Zacks Rank of #4 (Sell).
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California Resources Corporation (CRC): Free Stock Analysis Report W&T Offshore, Inc. (WTI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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