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Sempra Energy (SRE)
NYSE:SRE
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Sempra Energy
(NYSE:SRE)64Neutral
Positive Factors
Infrastructure Portfolio
Sempra's high-quality infrastructure portfolio has core positions in the attractive So Central/Southwest markets of No. America.
Stock Valuation
The 19% sell off is considered overdone, creating a potential buying opportunity.
Negative Factors
Earnings Guidance
SRE reported 4Q earnings and revised 2025 guidance to $4.30-$4.70, well below Street estimates of $5.15.
Regulatory Challenges
The impact of regulatory lag, inflationary wildfire costs, the associated financing requirements, and a more challenging FD in the company's California GRC cumulatively resulted in the company significantly cutting its 2025 outlook.
Sempra Energy (SRE) vs. S&P 500 (SPY)
Market Cap
$45.35B
Dividend Yield3.56%
Average Volume (3M)5.54M
Price to Earnings (P/E)15.8
Beta (1Y)0.71
Revenue Growth-18.00%
EPS Growth-7.54%
CountryUS
Employees16,835
SectorUtilities
Sector Strength79
IndustryRegulated Utilities
Share Statistics
EPS (TTM)4.42
Shares Outstanding651,457,300
10 Day Avg. Volume9,972,432
30 Day Avg. Volume5,541,914
Financial Highlights & Ratios
PEG Ratio3.62
Price to Book (P/B)N/A
Price to Sales (P/S)3.44
Price to Cash Flow (P/CF)8.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$83.08Price Target Upside19.88% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Sempra Energy Business Overview & Revenue Model
Company DescriptionSempra Energy (SRE) is a leading North American energy infrastructure company focused on delivering sustainable, reliable, and affordable energy solutions. The company operates primarily through two main subsidiaries: Sempra California, which includes San Diego Gas & Electric (SDG&E) and Southern California Gas Company (SoCalGas), and Sempra Texas, which includes Oncor Electric Delivery Company. Sempra Energy is involved in the transmission, distribution, and storage of electricity and natural gas, offering innovative energy solutions to residential, commercial, and industrial customers.
How the Company Makes MoneySempra Energy generates revenue primarily through its utility operations in California and Texas. The company earns money by providing electricity and natural gas services to millions of customers, charging them for the energy consumed. Sempra's regulated utilities, SDG&E and SoCalGas, derive income from fixed charges and usage-based rates approved by regulatory bodies. Additional revenue streams include infrastructure investments and the development of renewable energy projects. Sempra's joint ventures and partnerships, such as its stake in Oncor Electric Delivery Company, also contribute to its earnings by expanding its market reach and enhancing operational efficiencies.
Sempra Energy Financial Statement Overview
Summary
Sempra Energy demonstrates strong profitability and efficient operations but faces challenges in revenue growth consistency and cash flow management. Solid returns on equity and effective cost controls are notable strengths. Attention to cash flow stability and revenue growth trajectory is recommended to enhance financial health.Income Statement
Sempra Energy shows a strong net profit margin due to substantial net income growth. Gross profit margin remains healthy, indicating efficient cost management. However, the revenue growth rate is inconsistent, with a recent decline. EBIT and EBITDA margins are strong, indicating efficient core operations despite a recent drop in EBITDA.75
Positive
Balance Sheet
The balance sheet displays a moderate debt-to-equity ratio, suggesting manageable leverage levels. Return on Equity (ROE) is strong, indicative of effective use of equity to generate profits. The equity ratio is moderate, reflecting a balanced approach to financing through equity and liabilities.70
Positive
Cash Flow
Operating cash flow is robust, supporting net income well. However, free cash flow growth is concerning due to significant capital expenditures. The free cash flow to net income ratio indicates effective cash generation relative to earnings, but recent free cash flow figures are negative, highlighting potential cash management challenges.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 13.19B | 16.72B | 14.44B | 12.86B | 11.37B | Gross Profit |
| 6.72B | 5.94B | 5.21B | 5.30B | 5.04B | EBIT |
| 2.23B | 5.84B | 2.66B | 2.98B | 2.88B | EBITDA |
| 5.60B | 6.12B | 4.52B | 4.63B | 4.23B | Net Income Common Stockholders |
| 3.50B | 3.08B | 787.00M | 120.00M | 1.24B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.42B | 236.00M | 370.00M | 559.00M | 960.00M | Total Assets |
| 45.28B | 87.18B | 78.57B | 72.05B | 66.62B | Total Debt |
| 12.44B | 31.75B | 28.92B | 24.64B | 24.21B | Net Debt |
| 11.02B | 31.46B | 28.55B | 24.09B | 23.25B | Total Liabilities |
| 19.92B | 53.53B | 49.32B | 44.63B | 41.69B | Stockholders Equity |
| 25.36B | 28.70B | 27.14B | 26.00B | 23.39B |
| Cash Flow | Free Cash Flow | |||
| 4.91B | -2.18B | -4.21B | -1.17B | -2.08B | Operating Cash Flow |
| 4.91B | 6.22B | 1.14B | 3.84B | 2.59B | Investing Cash Flow |
| -9.12B | -8.72B | -5.04B | -5.51B | 553.00M | Financing Cash Flow |
| 5.42B | 2.42B | 3.78B | 1.26B | -2.37B |
Sempra Energy Technical Analysis
Negative
69.30
Price Trends
81.62
Negative
84.75
Negative
81.29
Negative
Market Momentum
-3.70
Positive
28.30
Positive
32.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SRE, the sentiment is Negative. The current price of 69.3 is below the 20-day moving average (MA) of 78.43, below the 50-day MA of 81.62, and below the 200-day MA of 81.29, indicating a bearish trend. The MACD of -3.70 indicates Positive momentum. The RSI at 28.30 is Positive, neither overbought nor oversold. The STOCH value of 32.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SRE.
Sempra Energy Risk Analysis
Sempra Energy disclosed 45 risk factors in its most recent earnings report. Sempra Energy reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sempra Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $89.47B | 20.27 | 9.10% | 3.61% | 4.46% | 54.09% | |
77 Outperform | $97.23B | 22.20 | 13.61% | 3.25% | 5.83% | 10.23% | |
73 Outperform | $54.70B | 18.37 | 11.37% | 3.53% | 2.76% | 31.53% | |
69 Neutral | $39.49B | 19.99 | 10.43% | 3.24% | -5.25% | 7.11% | |
67 Neutral | $144.01B | 20.75 | 14.24% | 3.02% | 26.91% | -6.43% | |
65 Neutral | $12.05B | 15.92 | 6.71% | 4.32% | 8.04% | 3.76% | |
64 Neutral | $45.35B | 15.77 | 9.55% | 3.56% | -18.00% | -7.54% |
* Utilities Sector Average
Performance Comparison
SRE
Sempra Energy
69.30
-1.02
-1.45%
AEP
American Electric Power
104.62
24.00
29.77%
DUK
Duke Energy
116.74
24.47
26.52%
NEE
NextEra Energy
72.83
16.55
29.41%
SO
Southern Co
91.40
23.96
35.53%
XEL
Xcel Energy
68.00
17.05
33.46%
Sempra Energy Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -20.51% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed outlook. While Sempra announced strong long-term growth expectations and a substantial capital investment plan, near-term challenges such as lowered 2025 EPS guidance, regulatory hurdles, and project delays were highlighted. Despite these challenges, the focus on strategic investments and growth opportunities, particularly in Texas, suggests a positive long-term trajectory.Highlights
EPS Growth Forecast Increase
Sempra has raised its projected long-term EPS growth rate to 7% to 9%, with expectations to achieve 9% or higher growth between 2025 and 2029.
Record Capital Plan
Sempra announced a new record capital plan of $56 billion for 2025-2029, representing a 16% increase over the prior plan, with a significant focus on investments in Texas.
Dividend Increase
Sempra's board of directors approved an increase in the company's annualized dividend for the fifteenth consecutive year to $2.58 per share.
Oncor's Strong Growth
Oncor reported a record $4.7 billion capital deployment and a 15% rate base growth. The company is preparing for a comprehensive base rate review, expected to strengthen its financial position.
Sempra Infrastructure Progress
Significant progress on dual-basin LNG strategy, with ECA LNG Phase 1 and Port Arthur LNG Phase 1 on budget and on schedule, and Port Arthur LNG Phase 2 targeting FID in 2025.
Lowlights
Lowered 2025 EPS Guidance
Sempra revised its full-year 2025 EPS guidance range to $4.30 to $4.70, below prior expectations, due to changes in California rate cases, interest rates, commodity prices, and O&M costs.
California Rate Case Challenges
The final decision on California GRC was less favorable than expected, impacting financial forecasts. This included a 42 basis point decrease in authorized ROE.
Oncor's Regulatory Lag
Oncor's regulatory lag and higher costs have pressured its earned ROE, leading to the decision to file a base rate review earlier than planned, affecting near-term earnings.
FERC Decision Impact
FERC issued an order finding SDG&E ineligible for a 50 basis point ISO adder, negatively impacting anticipated returns.
Delayed ECA LNG Phase 1 COD
ECA LNG Phase 1's commercial operation date was delayed to spring 2026, impacting financial projections for 2025.
Company Guidance
In Sempra's fourth quarter 2024 earnings call, the company provided a detailed financial overview, highlighting an adjusted EPS of $4.65, slightly below the midpoint of their guidance range. For 2025, the EPS guidance was adjusted to $4.30 to $4.70, reflecting factors such as California rate case decisions and updates in interest rates, commodity prices, and O&M costs. Oncor, a critical growth driver, is preparing for a base rate review to support Texas's rapid economic expansion, which saw over half a million new residents. The company announced a five-year capital plan of $56 billion, with a significant portion allocated to Oncor, anticipating a 7% to 9% long-term EPS growth rate. Additionally, Sempra's board approved an annualized dividend increase to $2.58 per share. Looking ahead, Sempra set a 2026 EPS guidance range of $4.80 to $5.30, driven by capital investments and infrastructure projects, targeting a compound annual rate-based growth of 10%.Sempra Energy Corporate Events
Executive/Board Changes
Sempra Energy Appoints New Board Members
Neutral
Feb 10, 2025
On February 8, 2025, Sempra Energy announced the appointment of two new members to its Board of Directors, Anya Weaving and Kevin C. Sagara. The appointments will be effective on March 1, 2025. Ms. Weaving will serve on the Audit and Compensation and Talent Development Committees and has been affirmed as an independent director and audit committee financial expert, while Mr. Sagara, who retired as Executive Vice President and Group President of Sempra in December 2023, will join the Safety, Sustainability and Technology Committee but is not considered independent due to his recent executive role.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.