With a market cap of $58.4 billion, San Diego, California-based Sempra (SRE) is a prominent player in the energy infrastructure sector. This company specializes in energy distribution, transmission, and infrastructure development in the U.S. and around the globe, playing a key role in the energy transition through electricity and natural gas services.
Over the past 52 weeks, Sempra’s stock has struggled to keep pace with the broader market. SRE has risen 31.7% during this period, whereas the S&P 500 Index ($SPX) has enjoyed a 35.7% increase. For 2024, Sempra shares have gained 23.4%, slightly trailing SPX’s YTD gain of 25.5%.
Interestingly, Sempra’s stock performance has closely mirrored the Utilities Select Sector SPDR Fund (XLU), which reported a 31.5% return over the past year and 23.7% year-to-date.
Despite posting weaker-than-expected Q3 adjusted EPS of $0.89 and revenues of $2.8 billion, Sempra’s shares surged by 7.3% on November 6. Key announcements contributed to this increase, including a $3 billion equity offering aimed at fueling growth without incurring excessive debt in a high-interest environment. Additionally, Sempra’s Texas utility, Oncor, plans to boost its five-year capital plan by 40%-50% to accommodate rising energy demand from sectors such as AI and data centers. This strategic move has been viewed by investors as a significant growth opportunity. Moreover, Sempra confirmed its long-term EPS growth target of 6%-8% and 2024 EPS guidance of $4.60–$4.90, while assuring that the Energia Costa Azul LNG project in Mexico is on track for its expected 2026 launch, boosting investor confidence in future earnings.
For this fiscal year, which ends in December, analysts anticipate SRE’s EPS to grow 3.5% year-over-year to $4.77. However, Sempra’s earnings surprise history has been varied. Out of the last four quarters, the company met consensus estimates once and fell short in the other three quarters.
The stock has garnered attention from analysts, with a consensus rating of “Strong Buy” from 18 covering analysts. This includes 13 “Strong Buy” ratings, one “Moderate Buy,” and four Holds, reflecting increased confidence compared to three months ago, when there were only 10 “Strong Buy” ratings.
On November 11, RBC Capital analyst Shelby Tucker affirmed a “Buy” rating on Sempra, setting a price target of $98.
Currently, SRE trades below the average price target of $93.67, while the highest street target of $102 suggests a potential upside of 10.6% from today’s price.
On the date of publication, Sohini Mondal 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
