Sempra Reports Decline Amidst Regulatory Challenges and Earnings Miss

San Diego, California-based Sempra (SRE) is a significant player in the energy services sector, focusing on the sale, distribution, storage, and transportation of electricity and natural gas. With a market capitalization of $45.1 billion, Sempra operates through its Sempra California, Sempra Texas Utilities, and Sempra Infrastructure segments.

As a large-cap stock, defined as a company worth $10 billion or more, Sempra’s valuation is in line with its extensive operations and considerable market presence.

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However, despite its robust foundation, Sempra has experienced a significant downturn, with its stock plummeting 27.5% from its all-time high of $95.77 reached on November 25, 2024. Over the past three months, SRE has declined by 21.6%, trailing the Nasdaq Composite’s (NASDAQ: NASX) 12.8% drop during the same timeframe.

Sempra’s struggles extend over a longer period as well. The stock has fallen 15.4% in the past six months and 2.3% in the past year, notably underperforming the Nasdaq, which has seen an increase of 42 basis points over the last six months and a 9.1% rise over the past year.

The recent trading pattern confirms this downturn. Since mid-December 2024, Sempra has mostly traded below its 50-day moving average and dropped below its 200-day moving average in late February 2025.

Sempra’s stock prices fell dramatically by 19% following the release of disappointing Q4 results on February 25. The company reported a 7.6% year-over-year growth in total revenues to approximately $3.8 billion, yet this figure fell short of Wall Street’s expectations of $4.9 billion. The adjusted earnings per share (EPS) of $1.50 also missed the consensus estimates by nearly 8%. Furthermore, due to ongoing regulatory matters and a challenging cost environment, Sempra lowered its fiscal 2025 EPS guidance from a range of $4.90 – $5.25 to $4.30 – $4.70. For fiscal 2026, the EPS guidance range is set at $4.80 to $5.30, which disappointed analysts and eroded investor confidence.

Despite these challenges, Sempra’s performance still surpasses that of the AES Corporation (AES), which has seen a 28.4% decline over the last six months and a 27.5% drop over the past year.

Among the 18 analysts covering Sempra, the consensus rating remains a “Moderate Buy.” Analysts have set a mean price target of $82.77, indicating a 19.1% premium over the current price levels.

On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

 

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