Sempra Energy (SRE) AI Stock Analysis

• Market Cap: $53.87B
• Dividend Yield: 3.06%
• Average Volume (3M): 3.41M
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.59
• Revenue Growth: 0.46%
• EPS Growth: -11.77%
• Country: US
• Employees: 16,773
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.89
• Shares Outstanding: 652,472,400
• 10 Day Avg. Volume: 2,994,383
• 30 Day Avg. Volume: 3,412,311
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.77
• Enterprise Value/Revenue: 7.21
• Enterprise Value/Gross Profit: 25.74
• Enterprise Value/Ebitda: 15.89
• 1Y Price Target: $84.88
• Price Target Upside: 2.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 71 Outperform
• Price Target: $90.00 ▲(9.01% Upside)

Sempra Energy's strong financial performance and positive technical indicators are the primary strengths, supported by a fair valuation and balanced earnings call outlook. However, cash flow challenges and regulatory pressures present risks that need to be managed.

Positive Factors

Financial Performance

Sempra Energy's 1Q25 EPS of $1.44 beat consensus estimates, indicating stronger than expected financial performance.

Growth Outlook

The company's growth outlook into 2029 is expected to be at or above the high end of the projected 7-9% EPS CAGR range, showcasing strong future growth potential.

Infrastructure Development

Sempra's high-quality infrastructure portfolio and robust cash flow from LNG development are expected to drive consolidated EPS growth and potential multiple expansion.

Negative Factors

Asset Sales Impact

The intended sale of Sempra Infrastructure represents an attractive financing alternative, with management aiming for accretion to earnings and credit.

Potential Dilution

The potential California Wildfire Fund recap could modestly dilute Sempra Energy's stock.

Regulatory Challenges

Oncor faces a regulatory lag, but the new Unified Tracking Mechanism provides a path to improve this starting in late 2026.

Sempra Energy Business Overview & Revenue Model

Company Description

Sempra Energy (SRE) is a leading energy services holding company based in the United States, primarily engaged in the development and operation of energy infrastructure. The company operates through two main segments: Utilities and Infrastructure. Its Utilities segment includes regulated electric and natural gas distribution operations, serving millions of customers in California and Texas. The Infrastructure segment focuses on the development and operation of energy infrastructure projects, including renewable energy assets, natural gas pipelines, and liquefied natural gas (LNG) export facilities, catering to both domestic and international markets.

How the Company Makes Money

Sempra Energy generates revenue primarily through its regulated utility operations, which earn returns on investments through rate structures approved by state regulators. This includes customer charges for electricity and natural gas distribution services. Additionally, the company earns revenue from its infrastructure segment by providing transportation and storage services for natural gas and developing renewable energy projects, which can include long-term contracts with customers. Key revenue streams also include fees from its LNG facilities and partnerships with other energy companies for joint ventures and development projects, enhancing its earnings potential in the growing energy market.

Sempra Energy Financial Statement Overview

Summary

Sempra Energy demonstrates robust profitability with a solid gross profit margin of 42.1% and a net profit margin of 22.2%. However, challenges include high leverage with a debt-to-equity ratio of 1.19 and negative free cash flow growth at -23.3%. The company efficiently utilizes equity with a return on equity of 9.4%, but needs to address cash flow management and leverage.

Income Statement

Sempra Energy exhibits solid profitability metrics with a gross profit margin of 42.1% and a net profit margin of 22.2% on a TTM basis. The revenue growth rate is modest at 1.23% from the previous year, which is steady but not particularly high. The EBIT margin stands at 22.7%, showing efficient operational management. Overall, the company demonstrates consistent profitability, although growth rates are moderate.

Balance Sheet

The company maintains a high debt-to-equity ratio of 1.19, indicating significant leverage which is common in the utilities industry. However, the return on equity is impressive at 9.4%, showcasing efficient use of equity to generate profits. The equity ratio of 31.9% reflects a balanced approach to asset financing, but there is room for improvement in reducing leverage.

Cash Flow

Sempra Energy faces challenges in cash flow management with negative free cash flow growth at -23.3%. The operating cash flow to net income ratio is 1.53, indicating strong cash generation relative to net income, although free cash flow remains negative. The free cash flow to net income ratio is -1.38, highlighting the need for improved capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.23B	12.96B	15.80B	15.55B	13.06B	11.35B
Gross Profit	3.71B	3.52B	3.75B	4.16B	3.64B	3.28B
EBITDA	6.00B	5.85B	6.12B	4.42B	3.26B	4.23B
Net Income	2.71B	2.86B	3.08B	2.14B	1.32B	3.93B
Balance Sheet
Total Assets	99.91B	96.16B	87.18B	78.57B	72.05B	66.62B
Cash, Cash Equivalents and Short-Term Investments	180.00M	1.56B	236.00M	370.00M	559.00M	960.00M
Total Debt	38.59B	35.85B	31.08B	28.92B	24.64B	24.21B
Total Liabilities	61.61B	58.37B	53.53B	49.32B	44.63B	41.69B
Stockholders Equity	31.72B	31.24B	28.70B	27.14B	26.00B	23.39B
Cash Flow
Free Cash Flow	-4.37B	-3.31B	-2.18B	-4.21B	-1.17B	-2.08B
Operating Cash Flow	4.65B	4.91B	6.22B	1.14B	3.84B	2.59B
Investing Cash Flow	-10.51B	-9.12B	-8.72B	-5.04B	-5.51B	553.00M
Financing Cash Flow	5.70B	5.42B	2.42B	3.78B	1.26B	-2.37B

Sempra Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 82.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 82.56 is above the 20-day moving average (MA) of 81.95, above the 50-day MA of 78.90, and above the 200-day MA of 78.39, indicating a bullish trend. The MACD of 0.78 indicates Positive momentum. The RSI at 57.01 is Neutral, neither overbought nor oversold. The STOCH value of 51.19 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	79 Outperform	$6.52B	5.05	22.94%	15.58%	-3.27%	-3.44%
BKH	77 Outperform	$4.36B	15.08	8.13%	4.48%	5.41%	-1.89%
ELP	72 Outperform	$6.40B	12.61	9.81%	6.17%	-5.28%	14.50%
SRE	71 Outperform	$53.87B	19.99	8.87%	3.06%	0.46%	-11.77%
Sector *	66 Neutral	$17.37B	18.10	5.54%	3.61%	6.63%	11.55%
BIP	65 Neutral	$20.52B	1,621.13	1.06%	5.39%	8.86%	―
AES	65 Neutral	$9.64B	9.56	21.17%	5.17%	-3.19%	30.48%

Sempra Energy Corporate Events

Sempra Energy Completes $800M Junior Notes Offering

On August 29, 2025, Sempra Energy successfully completed a public offering of $800 million in junior subordinated notes with a 6.375% fixed-to-fixed reset rate due in 2056. The proceeds, approximately $792 million after underwriting discounts, are intended to help redeem outstanding shares of the company’s Series C preferred stock, pending board approval. This financial maneuver is part of Sempra’s strategic efforts to optimize its capital structure, potentially impacting its financial flexibility and shareholder value.

Sempra Energy Announces Key Executive Leadership Changes

On June 21, 2025, Sempra’s Board of Directors promoted Caroline A. Winn to executive vice president overseeing its California utility subsidiaries, SoCalGas and SDG&E, while appointing her as a director and non-executive chairman of both boards. Concurrently, Peter R. Wall announced his resignation as senior vice president, controller, and chief accounting officer of Sempra. Dyan Z. Wold was promoted to replace him, bringing extensive experience from her previous roles within Sempra. These changes, effective July 5, 2025, reflect strategic leadership adjustments within the company.

Sempra Energy Benefits from New Texas Utility Law

On June 20, 2025, Texas House Bill 5247 was signed into law, establishing a ‘unified tracker mechanism’ (UTM) for electric utilities in Texas. This mechanism allows qualifying utilities to apply for interim rate adjustments annually for transmission and distribution (T&D) capital expenditures, potentially reducing regulatory lag. Oncor, a subsidiary of Sempra, expects to use this method to improve its earnings, cash flows, and credit metrics, with anticipated improvements in annual returns on equity by 50 to 100 basis points. The impact on Sempra’s earnings per share is expected to align with previously announced guidance for 2025 and 2026.