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Inside California Resources’ Recent Stock Performance

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CRC’s year-to-date performance

California Resources’ (CRC) stock price has widely underperformed crude oil (USO) and other oil and gas companies (XLE) on a YTD (year-to-date) basis. California Resources’ stock price has fallen ~50% YTD, whereas crude oil prices have fallen ~15%. In 2016, CRC’s stock fell ~9%.

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Post-earnings euphoria fizzle

California Resources announced its 1Q17 earnings on May 4, 2017. In 1Q17, excluding one-time items, CRC beat the consensus EPS (earnings per share) estimate by $0.24. After the earnings release, better-than-expected earnings saw CRC’s stock price increase from $10.16 to the high of $14.28 in just four sessions.

However, this is where CRC’s stock price faced a steep resistance from its 50-day moving average and retreated. After touching its 50-day moving average on May 11, CRC’s stock price started to lose the positive post-earnings price momentum and gave up all the post-earnings gains over a period of next four weeks.

CRC’s stock price is now trading below its 50-day and 200-day moving averages. On June 8, 2017, CRC’s stock price closed at $10.60, whereas its 50-day and 200-day moving averages stand at $12.59 and $14.74, respectively.

CRC’s peers

By comparison, peers Occidental Petroleum (OXY) and Murphy Oil (MUR) are have fallen ~16% and ~21%, respectively. This means that CRC is lagging behind its peers in 2017.

In this series, we’ll explore the reasons behind CRC’s stock price rally after its earnings release—and why the rally fizzled out. Specifically, we’ll analyze CRC’s earnings, revenues, production, and cash flow.

We’ll start with CRC’s most recent earnings.

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