Sempra Just Missed Revenue By 35%: Here's What Analysts Think Will Happen Next

Sempra (NYSE:SRE) just released its latest quarterly report and things are not looking great. Earnings came in short of expectations, with revenues of US$3.6b missing the mark by 35%, and statutory earnings per share of US$1.26 falling 3.8% short. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Sempra

Following the latest results, Sempra's 14 analysts are now forecasting revenues of US$15.5b in 2024. This would be a notable 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 6.2% to US$4.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$16.1b and earnings per share (EPS) of US$4.79 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at US$83.22even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Sempra at US$89.00 per share, while the most bearish prices it at US$75.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Sempra's growth to accelerate, with the forecast 17% annualised growth to the end of 2024 ranking favourably alongside historical growth of 10% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.2% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sempra to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also downgraded Sempra's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at US$83.22, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Sempra. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sempra analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Sempra you should be aware of, and 1 of them doesn't sit too well with us.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.