In a report released yesterday, Sarah Akers from Wells Fargo maintained a Buy rating on Sempra Energy (SRE – Research Report), with a price target of $79.00.
Sarah Akers has given her Buy rating due to a combination of factors pertaining to Sempra Energy’s recent performance and future growth prospects. The company’s end-of-year update aligns with Akers’ earnings per share (EPS) estimates, reflecting management’s confidence in achieving a 6-8% growth trajectory. The updated capital expenditure plan, which is at the higher end of the anticipated 10-20% range, is particularly noteworthy because of the significant role Texas plays in this expansion, with an expected rate base growth of 11% in the state. Additionally, the potential for incremental projects such as those tied to the System Resiliency Plan and LNG development projects, although not included in the current EPS growth targets, suggest the possibility of exceeding the higher end of the growth projection.
Moreover, Akers’ endorsement is reinforced by the positive updates on Sempra Energy’s liquefied natural gas (LNG) construction projects, which are progressing on schedule. Despite some uncertainty surrounding non-Free Trade Agreement (FTA) permits and environmental reviews, the company’s LNG endeavors are considered to be in a strong commercial and strategic position. The adjustment of the price target to $79 per share from $81, while a slight reduction, still supports the Overweight rating due to the robust infrastructure growth narrative, underscored by favorable trends in Texas such as customer growth, policy support, and broader electric sales growth trends.
Akers covers the Utilities sector, focusing on stocks such as Pinnacle West Capital, ONE Gas, and Evergy. According to TipRanks, Akers has an average return of 6.5% and a 64.18% success rate on recommended stocks.
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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.
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