Sempra Energy’s Growth Outlook Strengthened by Strategic Initiatives and Legislative Support

Ross Fowler, an analyst from Bank of America Securities, maintained the Buy rating on Sempra Energy (SRE – Research Report). The associated price target remains the same with $86.00.

Ross Fowler has given his Buy rating due to a combination of factors that enhance Sempra Energy’s growth outlook and financial stability. The company’s management has shown a strong 10-year growth plan, supported by three main catalysts: the sell-down of Sempra Infrastructure Partners, improved wildfire legislative protections in California, and the transition to a unified tracker mechanism in Texas. These factors contribute to a strengthened investment thesis for Sempra Energy.
In Texas, the passage of HB 5247 is particularly impactful, as it moves Oncor to a unified tracker mechanism, reducing regulatory lag and supporting earnings and cash flow. Additionally, the legislative support for high voltage transmission aligns with demographic and economic growth, presenting a significant spending opportunity. The ongoing sell-down process of Sempra Infrastructure Partners is on track, with confidence bolstered by supportive White House policies and market development in Asia. These elements collectively justify the Buy rating, as they position Sempra Energy for robust future growth.

In another report released on May 27, Morgan Stanley also maintained a Buy rating on the stock with a $87.00 price target.

SRE’s price has also changed moderately for the past six months – from $91.500 to $76.430, which is a -16.47% drop .