Sempra Energy (SRE) has received a new Buy rating, initiated by Evercore ISI analyst, Nicholas Amicucci.
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Nicholas Amicucci has given his Buy rating due to a combination of factors influencing Sempra Energy’s potential for growth and strategic positioning. A key element in his analysis is Sempra’s focus on expanding its investments in Texas, which is expected to drive significant growth opportunities. Despite the inherent wildfire risks associated with its California operations, Amicucci believes that the market has overly discounted these risks, especially given Sempra’s relatively lower exposure compared to its peers.
Furthermore, Sempra’s strategic moves, such as the sale of its Ecogas business and a stake in SIP, are seen as positive steps towards reducing non-regulated utility exposure and enhancing earnings visibility. These actions are expected to support Sempra’s ambitious EPS growth target of 7-9%. Additionally, the company’s ability to self-fund its Texas growth initiatives, coupled with regulatory benefits like the Unified Tracking Mechanism, further strengthens its financial outlook. Amicucci’s valuation approach, which considers Sempra’s jurisdictional growth and regulatory outlook, supports a target price of $105, implying a potential upside of approximately 15%, justifying his Buy rating.
In another report released on September 25, BMO Capital also reiterated a Buy rating on the stock with a $95.00 price target.