Sempra’s Stock Struggles Amidst Mixed Q1 Results and Analyst Ratings

Sempra (SRE), located in San Diego, California, operates as an energy infrastructure company. With a market cap of $49.5 billion, SRE is dedicated to providing sustainable energy and focuses on investing in, developing, and managing transmission and distribution infrastructures.

Recent Performance Compared to Market Indicators

In the past year, Sempra’s shares have lagged behind the broader market. While SRE has seen minor gains, the S&P 500 Index ($SPX) has increased nearly 9.2%. Year-to-date, SRE is down 13.6%, contrasting with the SPX’s decline of 3.7%.

Further examination reveals that SRE’s performance is also poor compared to the Utilities Select Sector SPDR Fund (XLU), which has advanced about 14% over the past year. On a year-to-date basis, the ETF’s 5.8% returns significantly surpass SRE’s double-digit losses during the same period.

Q1 Earnings Report and Forward Guidance

On May 8, SRE shares dipped slightly after the company reported its Q1 results. The adjusted earnings per share (EPS) of $1.44 surpassed Wall Street expectations of $1.21. Revenue reached $3.8 billion, reflecting a year-over-year increase of 4.5%. For the full year, SRE projects adjusted EPS to fall within the range of $4.30 to $4.70.

Analysts forecast a slight decrease in SRE’s EPS for the current fiscal year, ending in December, with an expectation of $4.62 on a diluted basis. Historically, the company’s earnings surprises have been lackluster, missing consensus estimates in three of the last four quarters while surpassing the forecast on one occasion.

Analyst Insights and Price Targets

A consensus among 18 analysts covering SRE indicates a “Moderate Buy” rating. This outlook contains eight “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds.” This sentiment reflects a slight decrease in bullishness from two months prior, when nine analysts rated it as a “Strong Buy.”

On April 23, Morgan Stanley (MS) analyst David Arcaro maintained an “Overweight” rating for SRE and elevated the price target to $89, suggesting a potential upside of 17.5% from current levels. The mean price target of $80.90 implies a 6.8% premium to SRE’s current price. Notably, the highest price target of $95 indicates an upside potential of 25.4%.

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

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