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 $84.00.
Sarah Akers has given her Buy rating due to a combination of factors that indicate strong growth potential for Sempra Energy (SRE). Firstly, SRE’s impressive first-quarter results and its sustained guidance showcased the unfolding Texas growth story, driven notably by a substantial $3 billion System Resiliency Plan (SRP) filed by Oncor. This plan, which includes significant capital expenditures and operational & maintenance activities, is set to ramp up from 2025 through 2027 and is seen as incremental to the company’s growth narrative. Additionally, the updated peak load forecast by ERCOT points towards robust demand growth, particularly from commercial and industrial customers, manufacturing, and the electrification of the oil and gas sector, ensuring a continued positive outlook for the energy provider.
Furthermore, Akers is optimistic about Sempra Infrastructure’s progress, including the positive Final Investment Decision on the Cimarrón wind project, part of the Energía Sierra Juarez complex. This project represents an addition to Sempra’s capital plan and reflects a minor yet significant increase in the company’s broader capital initiatives. Despite the recent pause in LNG export project approvals, management expects this to be temporary, and Akers anticipates further clarity on the expansion of these projects, which could significantly bolster SRE’s growth trajectory. The current market underperformance attributed to external wildfire risks and the LNG FID pause is considered by Akers as an attractive entry point for investors, prompting the reiteration of an Overweight rating and an increased price target.
According to TipRanks, Akers is a 4-star analyst with an average return of 7.2% and a 67.88% success rate. Akers covers the Utilities sector, focusing on stocks such as Dominion Energy, Northwest Gas, and Sempra Energy.
In another report released on April 23, Barclays also maintained a Buy rating on the stock with a $81.00 price target.
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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.
