A rare Buy rating from a sector specialist draws attention to Berry’s turnaround prospects and tactical upside.

Berry Corporation (BRY) is a California-focused upstream energy company specializing in the production of oil and natural gas, with a strategy centered on low-decline, long-lived conventional assets. Operating primarily in mature basins, Berry targets stable cash flows and capital returns even as the sector faces significant volatility and regulatory headwinds. Today’s upgrade by Johnson Rice from “Accumulate” to “Buy” is notable—not only because it bucks recent bearish sentiment in the sector but also because Johnson Rice is a respected boutique with deep expertise in U.S. E&Ps. This move could signal a pivotal shift in how the market views Berry’s risk/reward profile.

Key Takeaways:

• Johnson Rice upgrades Berry to Buy, underlining sector confidence.

• Potential upside is implied by the rating shift, though no explicit price target was provided.

• BRY has experienced a dramatic 1-year decline, now trading near annual lows, but posted a surprise Q1 earnings beat.

• Recent news: Berry outperformed Q1 earnings estimates and participated in a well-attended analyst call, hinting at improving fundamentals.

• Stock’s technicals show stabilization (RSI ~52), but sentiment remains cautious after a long downtrend.

Analyst Upgrade and Firm Background

Johnson Rice’s transition from “Accumulate” to “Buy” is more than a semantic shift. As a boutique research firm with a narrow but deep focus on energy equities, its voice carries disproportionate weight among institutional investors tracking U.S. oil and gas. Johnson Rice boasts a multi-decade history of sector coverage and is known for both independent thinking and high conviction calls. The firm’s previous “Accumulate” stance implied patience—today’s “Buy” suggests a belief in an imminent inflection point for Berry.

"Berry’s unique asset base and conservative capital strategy present a compelling value proposition as macro headwinds fade," noted a Johnson Rice analyst on today’s call.

While no explicit price target accompanied the upgrade, the change in tone itself is significant. In a market where upgrades from large, diversified banks can be diluted by macro overlays, Johnson Rice’s moves are surgical and based on deep company-specific insight.

Stock and Financial Performance: Is Berry’s Turnaround Real?

Berry’s last twelve months have been bruising. The stock dropped from a high of $7.03 to a low of $2.11, and now trades at $2.63—a staggering 62% drawdown from its peak. Over the past 30 days, BRY has hovered just above its multi-year lows, with daily volatility averaging 18.8% and sentiment still negative (111 up days vs. 136 down days over the past year).

However, Q1 2025 brought a notable surprise:

• Berry reported $0.12 per share in quarterly earnings, beating the Zacks consensus by 20%.

• Operating metrics and cash flows outperformed expectations, with management emphasizing capital discipline and cost controls on the earnings call.

Technically, the stock’s RSI at 51.6 and 20-day moving averages near current prices suggest relative stabilization but little bullish momentum—making the Johnson Rice call even more intriguing as a possible early signal of reversal.

Market Sentiment and Recent News

The last month has seen Berry under a harsh spotlight:

• Q1 Earnings Beat: Zacks reported, “Berry Petroleum (BRY) came out with quarterly earnings of $0.12 per share, beating consensus estimates.”

• Analyst Engagement: The May 8th analyst call was well-attended, with questions focused on capex discipline, regulatory exposure, and dividend policy—issues central to Berry’s investment thesis.

• Sector Context: While many peers have struggled with cost inflation and policy risk, Berry’s low-decline assets and hedging strategy have helped cushion the blow.

"Our focus remains on sustainable cash returns to shareholders while navigating California’s regulatory environment," CEO Fernando Araujo emphasized during the Q1 call (Seeking Alpha – Transcript).

Tactical Upside: What Does the Upgrade Mean for Investors?

With no new price target, we infer Johnson Rice’s conviction from the binary nature of their rating system and their history of well-timed calls. Considering Berry’s current price near all-time lows and the stabilization in both operations and sentiment, the upgrade suggests a contrarian but potentially rewarding tactical play.

• Potential Upside: If Berry merely retraces half its recent decline (to $4–$5), investors could see a 50–90% return from current levels. While this is speculative without an explicit target, the upgrade signals that Johnson Rice sees risk skewed to the upside.

• Risks: Regulatory uncertainty in California, commodity price volatility, and sentiment-driven selloffs remain key risks. However, Berry’s strong Q1 beat and disciplined capital allocation posture provide tangible reasons for optimism.

Contrarian Tailwinds: Why This Call Stands Out

Unlike a sector-wide upgrade tied to oil prices, this rating is rooted in Berry’s company-specific turnaround. Johnson Rice’s energy focus, historical independence, and the timing of this call—immediately after a surprise earnings beat and near technical support—make this upgrade a genuine outlier worth monitoring closely.

Final Thoughts

Johnson Rice’s Buy rating on Berry Corporation is a classic contrarian signal: high risk, high potential reward. While the lack of a new price target leaves room for interpretation, all signs point to a calculated call on operational stabilization, management discipline, and an attractive entry point after a bruising selloff. As always, active monitoring of regulatory developments and Q2 operational trends will be critical, but for now, Berry’s turnaround narrative just gained a powerful new advocate.