Sempra (SRE, Financial) has announced its first quarter revenue of $3.80 billion, which fell short of the expected $3.92 billion. The company attributed the solid quarterly performance to its ongoing efforts to enhance financial outcomes while advancing strategic goals.
The CEO emphasized the company's commitment to a disciplined growth strategy that focuses on providing safer and more reliable energy services to nearly 40 million customers. Sempra's initiatives aim to create long-term value for various stakeholders, including shareholders, employees, and customers.
During the first quarter, Sempra made substantial progress in executing its plans. The company anticipates that its ongoing efforts, projected through 2025, will bolster earnings growth and deliver greater benefits to both consumers and communities in its service areas.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for Sempra (SRE, Financial) is $79.66 with a high estimate of $89.00 and a low estimate of $70.00. The average target implies an upside of 5.01% from the current price of $75.86. More detailed estimate data can be found on the Sempra (SRE) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Sempra's (SRE, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sempra (SRE, Financial) in one year is $81.97, suggesting a upside of 8.05% from the current price of $75.86. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sempra (SRE) Summary page.
SRE Key Business Developments
Release Date: February 25, 2025
- Adjusted EPS (2024): $4.65, just below the midpoint of guidance range.
- 2025 EPS Guidance: Revised to $4.30 to $4.70.
- 2026 EPS Guidance: Projected range of $4.80 to $5.30, representing roughly a 12% growth rate from the midpoint of 2025 guidance.
- Annualized Dividend: Increased to $2.58 per share, marking the 15th consecutive year of increases.
- 2024 Adjusted Earnings: Approximately $3 billion.
- 2024 GAAP Earnings: $2,817 million or $4.42 per share.
- 2024 Capital Deployment: Nearly $10 billion across three business lines.
- Five-Year Capital Plan (2025-2029): $56 billion, a 16% increase over the prior plan.
- Oncor Capital Plan (2025-2029): $36 billion, a 50% increase over the previous plan.
- 2024 Rate Base: $56 billion, projected to expand to over $91 billion by 2029.
- 2024 Fourth Quarter GAAP Earnings: $665 million or $1.04 per share.
- 2024 Fourth Quarter Adjusted Earnings: $960 million or $1.50 per share.
- Long-term EPS Growth Rate: Raised to 7% to 9%.
- Sempra Texas Growth: Expected to account for over half of the $56 billion five-year capital plan.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sempra (SRE, Financial) announced a new record capital plan of $56 billion for 2025 to 2029, representing a 16% increase over the prior plan.
- The company delivered a total return of 21% in 2024 and a solid total return over the last three years of 45%, which compares favorably to the utility sector.
- Sempra (SRE) is raising its projected long-term EPS growth rate to 7% to 9%, with expectations to exceed this range in the 2025 to 2029 period.
- Oncor, a subsidiary of Sempra (SRE), is experiencing significant growth, with a new five-year capital plan totaling $36 billion, an increase of 50% over the previous plan.
- Sempra (SRE) announced an increase in the company's annualized dividend for the 15th consecutive year to $2.58 per share.
Negative Points
- Sempra (SRE) revised its 2025 EPS guidance range to $4.30 to $4.70, which falls below prior expectations.
- The company is facing regulatory challenges, including a 42 basis point decrease in return on equity determined by the CPUC and the removal of a 50 basis point CAISO adder by FERC.
- Higher interest expenses are anticipated due to increased capital investments and changes in interest rates.
- The delay in ECA LNG Phase 1 COD until spring of 2026 and recent changes to natural gas price assumptions are impacting Sempra Infrastructure's guidance.
- Sempra (SRE) is experiencing regulatory lag in Texas, impacting Oncor's earned ROEs, which are currently between 8% and 9%.
