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Sempra Energy (SRE)
NYSE:SRE
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Sempra Energy
(NYSE:SRE)
Rating:72Outperform
Price Target:
$84.00
▲(9.30%Upside)
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.
Strategic Direction
Analyst maintains a Buy rating, indicating confidence in SRE's strategic direction.
Negative Factors
Credit Concerns
Credit concerns remain following Moody's outlook downgrade to Negative.
Interest Rate Impact
Earnings outlook remains challenging, with higher corporate interest rate assumption leading to marginally lower estimates.
Regulatory Challenges
Regulatory reservations and rate case concerns hang over reduced guidance.
Sempra Energy (SRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$49.53B
Dividend Yield3.26%
Average Volume (3M)3.59M
Price to Earnings (P/E)16.7
Beta (1Y)0.62
Revenue Growth-0.39%
EPS Growth0.75%
CountryUS
Employees16,773
SectorUtilities
Sector Strength79
IndustryDiversified Utilities
Share Statistics
EPS (TTM)1.44
Shares Outstanding652,170,400
10 Day Avg. Volume3,268,254
30 Day Avg. Volume3,586,657
Financial Highlights & Ratios
PEG Ratio-6.39
Price to Book (P/B)1.53
Price to Sales (P/S)0.00
P/FCF Ratio-14.86
Enterprise Value/Market Cap1.68
Enterprise Value/Revenue1.58
Enterprise Value/Gross Profit16.89
Enterprise Value/Ebitda3.88
Forecast
1Y Price Target
$81.20Price Target Upside5.66% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
Sempra Energy Business Overview & Revenue Model
Company DescriptionSempra Energy (NYSE: SRE) is a North American energy infrastructure company headquartered in San Diego, California. The company operates through its various subsidiaries, focusing primarily on electric and natural gas infrastructure and utilities. Sempra Energy's core business sectors include electric transmission and distribution, natural gas distribution, and energy infrastructure development. The company's key subsidiaries include Southern California Gas Company, San Diego Gas & Electric, and Sempra Infrastructure, which are integral in delivering essential energy services to millions of customers in the United States and Mexico.
How the Company Makes MoneySempra Energy generates revenue primarily through its regulated utilities and energy infrastructure businesses. The company's regulated utilities, which include Southern California Gas Company and San Diego Gas & Electric, provide electric and natural gas services, earning revenues through regulated rates set by state commissions. Additionally, Sempra Infrastructure focuses on developing and operating energy infrastructure projects, including natural gas pipelines, storage facilities, and liquefied natural gas (LNG) export terminals. Revenues from these operations come from long-term contracts and user fees for the infrastructure services provided. Sempra Energy's earnings are significantly influenced by regulatory decisions, energy market conditions, and its ability to secure long-term contracts with reliable counterparties.
Sempra Energy Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 1.31%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call presented strong financial results and strategic initiatives, such as EPS growth, significant infrastructure investments, and plans for asset sales. However, challenges remain, including safety incidents, regulatory hurdles, and economic uncertainties.Q1-2025 Updates
Positive Updates
EPS Growth and Guidance
Reported first quarter 2025 adjusted EPS of $1.44, up from $1.34 in the prior year. Affirmed full-year 2025 adjusted EPS guidance range of $4.34 to $4.70 and 2026 guidance of $4.80 to $5.30.
Investment in Energy Infrastructure
Plans to invest approximately $13 billion in energy infrastructure in 2025, with over $10 billion targeted for U.S. utilities.
Oncor Expansion and Texas Growth
Oncor is well-positioned to construct significant portions of the proposed $32 billion to $35 billion ERCOT regional transmission plan.
Sempra Infrastructure Partners Sale
Announced intention to sell a minority interest in Sempra Infrastructure Partners, expecting robust demand for the energy infrastructure assets.
California Climate Credit
Implemented a one-time California climate credit, reducing customer bills by up to $136 at SDG&E and $87 at SoCalGas.
Negative Updates
Safety Incidents at Port Arthur LNG
Reported safety incidents at the Port Arthur facility resulted in the loss of three employees.
Regulatory Challenges in Texas
Pending legislative changes and rate case filings could impact financial outcomes; continued monitoring is necessary.
Macroeconomic Uncertainty
Potential impacts on project development timelines, particularly for Port Arthur Phase 2.
Company Guidance
During Sempra's first quarter 2025 earnings call, the company reported an adjusted EPS of $1.44, up from $1.34 in the prior period, and confirmed their full-year 2025 adjusted EPS guidance range of $4.30 to $4.70, while also maintaining 2026 EPS guidance of $4.80 to $5.30. Sempra reiterated its projected long-term EPS CAGR of 7% to 9% for 2025 to 2029, aiming for the high end or above that range. The company plans to invest approximately $13 billion in energy infrastructure this year, with over $10 billion for U.S. utilities, and announced intentions to sell a minority interest in Sempra Infrastructure Partners. Sempra is also continuing its strategy of divesting non-core assets, such as Ecogas, to support growth and reduce reliance on future common equity issuances. The company emphasized initiatives to enhance customer service and productivity through technology and artificial intelligence, and continues to focus on delivering safe and reliable energy, particularly through wildfire mitigation efforts in California.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 |
| 6.09B | 5.94B | 5.21B | 5.30B | 5.04B | EBIT |
| 2.96B | 5.84B | 2.66B | 2.98B | 2.88B | EBITDA |
| 5.85B | 6.12B | 4.52B | 4.63B | 4.23B | Net Income Common Stockholders |
| 2.86B | 3.08B | 787.00M | 120.00M | 1.24B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.56B | 236.00M | 370.00M | 559.00M | 960.00M | Total Assets |
| 96.16B | 87.18B | 78.57B | 72.05B | 66.62B | Total Debt |
| 35.85B | 31.75B | 28.92B | 24.64B | 24.21B | Net Debt |
| 34.28B | 31.46B | 28.55B | 24.09B | 23.25B | Total Liabilities |
| 58.37B | 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 | |||
| -3.31B | -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
Neutral
76.85
Price Trends
73.77
Positive
75.38
Positive
79.88
Negative
Market Momentum
0.77
Positive
52.85
Neutral
19.09
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SRE, the sentiment is Neutral. The current price of 76.85 is below the 20-day moving average (MA) of 77.05, above the 50-day MA of 73.77, and below the 200-day MA of 79.88, indicating a neutral trend. The MACD of 0.77 indicates Positive momentum. The RSI at 52.85 is Neutral, neither overbought nor oversold. The STOCH value of 19.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SRE.
Sempra Energy Risk Analysis
Sempra Energy disclosed 46 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 3 New Risks
1.
An impairment of our goodwill or long-lived assets could result in a material charge to earnings. Q4, 2024
2.
Sempra Infrastructure's business is capital-intensive and relies on various types of financing arrangements, which may not be adequate or available in the future. Q4, 2024
3.
Successfully completing our five-year capital expenditures plan is subject to certain risks. Q4, 2024
Sempra Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $6.22B | 4.17 | 26.38% | 15.35% | -4.14% | 13.02% | |
78 Outperform | $6.47B | 12.63 | 9.22% | 4.95% | -7.02% | 17.33% | |
72 Outperform | $49.53B | 16.71 | 9.76% | 3.26% | -0.39% | 0.75% | |
68 Neutral | $4.15B | 14.61 | 8.02% | 4.64% | 3.28% | -3.49% | |
64 Neutral | $21.84B | 2,867.59 | 0.47% | 4.98% | 12.40% | -108.27% | |
64 Neutral | $8.54B | 10.30 | 4.69% | 4.37% | 4.14% | -13.04% | |
54 Neutral | $7.75B | 5.95 | 29.79% | 6.40% | -3.22% | 141.11% |
* Utilities Sector Average
Performance Comparison
SRE
Sempra Energy
76.85
4.11
5.65%
BKH
Black Hills
57.17
6.03
11.79%
BIP
Brookfield Infrastructure
33.51
6.34
23.33%
CIG
Companhia Energetica Minas Gerais
1.84
0.24
15.00%
ELP
Companhia Paranaense de Energia Pfd
8.89
2.35
35.93%
AES
AES
10.89
-8.77
-44.61%
Sempra Energy Corporate Events
Private Placements and Financing
Sempra Energy Subsidiary Completes $1.1 Billion Bond Offering
Positive
May 16, 2025
On May 16, 2025, Southern California Gas Company, an indirect subsidiary of Sempra, completed a public offering of $600 million in 5.450% First Mortgage Bonds due 2035 and $500 million in 6.000% First Mortgage Bonds due 2055. The proceeds from these offerings will support the company’s financial activities, potentially strengthening its market position and providing benefits to stakeholders.
The most recent analyst rating on (SRE) stock is a Buy with a $85.00 price target. To see the full list of analyst forecasts on Sempra Energy stock, see the SRE Stock Forecast page.
Shareholder MeetingsBusiness Operations and Strategy
Sempra Energy Shareholders Approve Key Proposals
Positive
May 15, 2025
On May 13, 2025, Sempra held its Annual Shareholders Meeting where shareholders elected all eleven director nominees, ratified Deloitte & Touche LLP as the independent public accounting firm for 2025, and approved the company’s executive compensation. These decisions reflect strong shareholder support for the company’s leadership and strategic direction, potentially reinforcing Sempra’s position in the energy sector and influencing its future operations.
The most recent analyst rating on (SRE) stock is a Buy with a $85.00 price target. To see the full list of analyst forecasts on Sempra Energy stock, see the SRE Stock Forecast page.
Private Placements and FinancingBusiness Operations and Strategy
Sempra Energy Subsidiary Issues $1.1 Billion Bonds
Positive
May 13, 2025
On May 12, 2025, Southern California Gas Company, a subsidiary of Sempra, entered into an underwriting agreement to issue $1.1 billion in First Mortgage Bonds. This strategic move aims to strengthen the company’s financial position and enhance its market offerings, potentially impacting stakeholders positively by ensuring long-term financial stability.
The most recent analyst rating on (SRE) stock is a Buy with a $85.00 price target. To see the full list of analyst forecasts on Sempra Energy stock, see the SRE Stock Forecast page.
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.