California Resources (CRC) Stock Lower Today as Oil Prices Slump
NEW YORK (TheStreet) -- Shares of California Resources Corp. (CRC) - Get Report are down 4.28% to $6.48 in midday trading today as oil prices decline.
West Texas Intermediate was down 3.55% to $43.25 at 11:57 a.m. in New York. Brent was lower by 3.33% to $53.18.
The U.S. benchmark followed Brent lower on rising global inventories and signs of a possible nuclear deal with Tehran that could allow more Iranian oil exports, Reuters reports.
"The prospect of an increase in Iranian oil sales as part of a new agreement in the next couple of months will only exacerbate OPEC oversupply, supporting our bearish outlook," Barclays told Reuters.
California Resources is a Los Angeles-based independent oil and natural gas exploration and production company.
Separately, the average recommendation of three brokers' estimates is a 3.3, with a 3 rating representing a "hold" rating and a 4 an "underperform." The mean target price is $8.33.
Insight from TheStreet's Research Team:
After the company reported fourth quarter results late last month that missed analysts' estimates, TheStreet's David Katz listened in to the conference call and shared some of his insight on Realmoneypro.com.
Here's a part of what he had to say:
...The majority of the Q&A during the Q4 call was about the balance sheet. The company does not like having this much leverage in the current oil price environment and is looking to deleverage in the short to medium term in a way that increases value to the equity holders. It is considering joint venturing on various projects and selling assets. It also mentioned MLPs as a possible way to raise capital and reduce debt.
When specifically asked about the possibility of selling shares to reduce debt, CEO Todd Stevens said, 'The absolute last thing they want to do is dilute any of our shareholders. We think it would be a much better outcome to find other ways to pay down debt.'
Beyond the company update, as of the most recent quarterly filings, two savvy, value-driven investors have built a meaningful stake in CRC. Soroban, a hedge fund, has a 9.9% position, and Southeastern Management has built up an 8.8% holding.
-David Katz, 'Oil Spinoff Having a Good Start' originally published 2/24/2015 on Realmoneypro.com.
Want more information like this from David Katz BEFORE your stock moves? Learn more about Realmoneypro.com now.