Sempra Energy (SRE) AI Stock Analysis

• Market Cap: $62.30B
• Dividend Yield: 2.91%
• Average Volume (3M): 4.60M
• Price to Earnings (P/E): 34.7
• Beta (1Y): 0.59
• Revenue Growth: 9.07%
• EPS Growth: -28.58%
• Country: US
• Employees: 16,773
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 1.28
• Shares Outstanding: 653,284,100
• 10 Day Avg. Volume: 3,533,259
• 30 Day Avg. Volume: 4,598,497
• PEG Ratio: -0.82
• Price to Book (P/B): 1.82
• Price to Sales (P/S): 4.20
• P/FCF Ratio: -9.53
• Enterprise Value/Market Cap: 1.56
• Enterprise Value/Revenue: 7.08
• Enterprise Value/Gross Profit: 24.17
• Enterprise Value/Ebitda: 16.00
• 1Y Price Target: $102.00
• Price Target Upside: 6.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11
• EPS Forecast (FY): 5.11
• Revenue Forecast (FY): $14.76B

• Rating: 63 Neutral
• Price Target: $101.00 ▲(5.91% Upside)
• Action: Reiterated Date: 02/27/26
• Date: Action: Reiterated 02/27/26

The score is held back primarily by mixed financial performance—especially uneven cash generation and recent revenue pressure—despite a serviceable utility balance sheet. Offsetting this, technicals are positive with strong price momentum, and the earnings call supported the outlook through reaffirmed/raised-forward guidance and capital allocation progress. Valuation is a constraint given the elevated P/E versus a moderate dividend yield, while recent corporate events are net supportive but include legal/regulatory risk.

Positive Factors

Regulated utility franchise and rate-based revenues

Sempra’s core utility businesses (SDG&E, SoCalGas) operate with state-approved rate-based pricing and long-term customer demand, creating predictable cash flows and regulatory recovery mechanics. This durable business model supports stable earnings and capital planning over multi-year horizons.

Strategic asset monetization and capital deployment

Monetizing a 45% SIP stake for $10B crystallizes value, reduces near-term funding needs, and provides dry powder to de-risk projects or pay down debt. Management expects EPS accretion beginning 2027, improving capital efficiency and funding for prioritized utility and LNG investments.

Material growth opportunity from Oncor Texas rate case

The proposed Oncor settlement would raise allowed revenues and authorized ROE, delivering a durable earnings and cash-flow uplift if approved. Given Oncor's scale and multi-year capital plan, favorable Texas outcomes materially strengthen Sempra’s regulated growth profile through 2030.

Negative Factors

Sustained top-line weakness

Sharp multi-year revenue declines reduce operating leverage and erode return on invested capital. Persistent top-line pressure constrains margin expansion, limits internal funding for capex/dividends, and makes earnings more sensitive to one-off items and regulatory adjustments.

Uneven and historically negative free cash flow

Multi-year negative FCF reflects heavy capex and timing swings, undermining consistent self-funding. Volatile cash conversion limits flexibility to reduce leverage, fund dividends, or absorb regulatory/tax shocks without further monetizations or external financing.

California regulatory and litigation exposure

Large regulatory disallowances and ongoing wildfire litigation (Eaton/Palisades) create recurring downside risk to earnings, cash and credit metrics. Even with insurance or recovery efforts, multi-year regulatory uncertainty can divert management focus and increase capital earmarked for contingencies.

Sempra Energy Business Overview & Revenue Model

Company Description

Sempra operates as an energy-services holding company in the United States and internationally. The company's San Diego Gas & Electric Company segment provides electric services; and supplies natural gas. It offers electric services to approximately 3.6 million population and natural gas services to approximately 3.3 million population that covers 4,100 square miles. Its Southern California Gas Company segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas to a population of approximately 22 million covering an area of 24,000 square miles. The company's Sempra Texas Utilities segment engages in the regulated transmission and distribution of electricity serving 3.8 million homes and businesses, and operation of 140,000 miles of transmission and distribution lines. Its transmission system includes 18,249 circuit miles of transmission lines, a total of 1,174 transmission and distribution substations, and interconnection to 130 third-party generation facilities totaling 45,403 megawatts. The company was formerly known as Sempra Energy and changed its name to Sempra in July 2021. Sempra was founded in 1998 and is headquartered in San Diego, California.

How the Company Makes Money

Sempra Energy generates revenue primarily through the sale of electricity and natural gas to residential, commercial, and industrial customers. The company operates regulated utility businesses that earn revenue through rate-based pricing, which allows them to charge customers based on state-approved rates that ensure recovery of costs and a reasonable return on investment. Additionally, Sempra Infrastructure's operations in LNG and renewable energy projects provide revenue through long-term contracts and sales agreements with energy companies and governments. The company also benefits from partnerships with other energy firms and investments in large-scale infrastructure projects, further diversifying its revenue streams and enhancing its profitability.

Sempra Energy Financial Statement Overview

Summary

Financial statement scores are mixed (Income 58, Balance Sheet 63, Cash Flow 46). Recent revenue declines are a notable headwind and 2025 shows unusual operating-profit volatility (negative EBITDA/zero EBIT reported), while leverage looks utility-typical but returns on equity have faded. Cash flow is the weakest area given multi-year negative free cash flow and uneven cash conversion despite a better 2025.

Income Statement

Revenue has been pressured recently (down ~18% in 2024 and ~24% in 2025), which is a clear top-line headwind. Profitability is mixed: net margins remain healthy for a utility (roughly mid-teens to low-20s in most years), but 2025 shows unusual volatility with negative EBITDA and zero EBIT reported, suggesting one-time items or reporting noise that weakens confidence in the run-rate. Net income also stepped down from 2023–2024 levels.

Balance Sheet

Leverage is meaningful but broadly in-line for a large regulated utility: debt-to-equity has generally hovered around ~0.9–1.15, indicating a balance between debt funding and equity support. Return on equity has trended down from stronger levels earlier in the period (notably 2020) to mid-single digits in 2025, pointing to weaker earnings power versus the capital base. Overall, the capital structure looks serviceable, but declining returns and high absolute debt keep risk elevated.

Cash Flow

Cash generation is uneven. Operating cash flow is positive each year, but the level has been volatile (notably weak in 2022), and free cash flow was negative in most years (2020–2024), consistent with heavy utility capital spending and/or timing swings. While 2025 shows positive free cash flow and roughly matches net income, the sharp negative free-cash-flow growth signal and prior multi-year deficits suggest cash conversion is not consistently strong.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	13.71B	12.96B	15.80B	15.55B	13.06B
Gross Profit	4.00B	3.52B	3.75B	4.16B	3.64B
EBITDA	6.87B	5.85B	6.12B	4.42B	3.26B
Net Income	1.84B	2.86B	3.08B	2.14B	1.32B
Balance Sheet
Total Assets	48.69B	96.16B	87.18B	78.57B	72.05B
Cash, Cash Equivalents and Short-Term Investments	2.00M	1.56B	236.00M	370.00M	559.00M
Total Debt	35.02B	35.85B	31.08B	28.92B	24.64B
Total Liabilities	68.88B	58.37B	53.53B	49.32B	44.63B
Stockholders Equity	31.61B	31.24B	28.70B	27.14B	26.00B
Cash Flow
Free Cash Flow	-6.05B	-3.31B	-2.18B	-4.21B	-1.17B
Operating Cash Flow	4.57B	4.91B	6.22B	1.14B	3.84B
Investing Cash Flow	-12.54B	-9.12B	-8.72B	-5.04B	-5.51B
Financing Cash Flow	9.93B	5.42B	2.42B	3.78B	1.26B

Sempra Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 95.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SRE, the sentiment is Positive. The current price of 95.36 is above the 20-day moving average (MA) of 91.97, above the 50-day MA of 89.68, and above the 200-day MA of 84.53, indicating a bullish trend. The MACD of 1.89 indicates Negative momentum. The RSI at 65.70 is Neutral, neither overbought nor oversold. The STOCH value of 71.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SRE.

Sempra Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIG	70 Outperform	$6.90B	8.86	13.35%	12.98%	-0.38%	-53.94%
SO	68 Neutral	$108.35B	24.73	12.54%	3.40%	9.40%	-6.05%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
BKH	64 Neutral	$5.61B	18.65	7.96%	3.91%	7.03%	6.64%
SRE	63 Neutral	$62.30B	34.72	5.85%	2.91%	9.07%	-28.58%
BIP	59 Neutral	$18.16B	40.28	7.99%	4.92%	8.14%	―
AES	54 Neutral	$10.10B	8.63	23.02%	5.06%	-1.55%	12.83%

Sempra Energy Corporate Events

Sempra’s Oncor Unit Reaches Settlement in Texas Rate Case

On January 29, 2026, Oncor Electric Delivery Company, 80.25%-owned by Sempra Energy, filed an unopposed settlement in its comprehensive base rate review in Texas, seeking approval for an annual revenue requirement of about $6.975 billion, representing an 8.8% increase and an estimated annualized revenue uplift of roughly $560 million over adjusted present revenues, alongside an updated capital structure of 56.5% debt and 43.5% equity, a higher authorized return on equity of 9.75%, and a higher authorized cost of debt of 4.94%. The settlement, which also raises the annual self-insurance reserve for storm and other self-insured losses to $200 million and introduces a five-year amortization period for certain regulatory balances, remains subject to modification or rejection by the Public Utility Commission of Texas, with a final order expected in the first half of 2026 and new rates, including surcharges back to January 1, 2026, anticipated to bolster Oncor’s future earnings, cash flow, and credit metrics if approved as requested.

The most recent analyst rating on (SRE) stock is a Buy with a $97.00 price target. To see the full list of analyst forecasts on Sempra Energy stock, see the SRE Stock Forecast page.

SoCalGas Addresses Edison Cross-Claims in Eaton Fire Litigation

On January 21, 2026, SoCalGas responded publicly to cross-claims filed on January 16, 2026 by Southern California Edison in the ongoing Eaton Fire litigation, in which Edison named SoCalGas and more than a dozen other defendants. SoCalGas criticized the cross-claims as an effort by Edison to shift responsibility for the Eaton fire, pledged to vigorously defend its operational response during the emergency, and said it will seek to recover from Edison for damage to its own system. The company noted it is reviewing the allegations and will pursue insurance coverage, including wildfire insurance, for system damages and for the costs of defending both Edison’s claims and related lawsuits from the Palisades fire. SoCalGas also highlighted its year-long effort working with local and state officials to repair fire-damaged infrastructure and restore gas service safely to thousands of affected customers, underscoring its operational resilience and ongoing role in regional recovery from last year’s wildfires.

The most recent analyst rating on (SRE) stock is a Buy with a $95.00 price target. To see the full list of analyst forecasts on Sempra Energy stock, see the SRE Stock Forecast page.

Sempra Updates 2025 Earnings Outlook, Reaffirms 2026 Guidance

On December 19, 2025, Sempra said it now expects full-year 2025 adjusted diluted EPS to come in at the high end of its previously announced $4.30–$4.70 range, while updating its 2025 GAAP EPS guidance to $2.38–$2.78 to reflect nine-month results and a sizeable estimated fourth-quarter charge tied to a proposed California Public Utilities Commission decision on San Diego Gas & Electric’s Track 2 rate case and other regulatory disallowances, as well as foreign currency, derivatives and tax items related to assets held for sale. The company also reaffirmed its 2026 adjusted EPS guidance of $4.80–$5.30, underscoring confidence in underlying operational performance despite regulatory and tax headwinds and signaling that, once one-off items are stripped out, management sees earnings power strengthening across its regulated utility and infrastructure portfolio.

The most recent analyst rating on (SRE) stock is a Hold with a $96.00 price target. To see the full list of analyst forecasts on Sempra Energy stock, see the SRE Stock Forecast page.