Sempra Energy (SRE – Research Report), the Utilities sector company, was revisited by a Wall Street analyst today. Analyst Jeremy Tonet from J.P. Morgan upgraded the rating on the stock to a Buy and gave it a $86.00 price target.
Jeremy Tonet has given his Buy rating due to a combination of factors surrounding Sempra Energy’s strategic positioning and financial outlook. Sempra’s leverage in the Texas market is perceived as undervalued, especially considering the significant demand and the ability to invest in system upgrades without impacting ratepayer affordability. The company’s subsidiary, Oncor, is expected to see its rate base double within five to six years, signaling substantial growth potential. Sempra’s proactive approach to financing, including a recent equity offering, is likely to facilitate capital investment without the need for additional equity, mitigating the risk of dilution for investors and demonstrating efficient financial management.
Furthermore, Sempra’s growth forecast of 6-8% is considered conservative, suggesting there is room for upward revisions in future guidance that could surpass market expectations. Long-term liquefied natural gas (LNG) projects, such as the Port Arthur development, are anticipated to further bolster Sempra’s growth in the latter part of the decade. The improved valuation multiples for Sempra’s California utilities also contribute to a more favorable risk profile, supported by a stable regulatory environment and higher return on equity compared to peers. These factors collectively underpin Tonet’s rationale for upgrading Sempra Energy’s stock to a Buy rating and identifying it as a top pick for the upcoming year.
See today’s best-performing stocks on TipRanks >>
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Sempra Energy (SRE) Company Description:
Sempra Energy is an energy service company which engages in the sale, distribution, storage and transportation of electricity and natural gas. The company has over 35 million customers across North America, with a strong focus on the most attractive markets including California, Texas, Mexico and the LNG export market.
Read More on SRE:
