A Fresh Look at Sempra (SRE) Valuation Following Recent Share Price Momentum

Sempra (SRE) stock has been on investors' radar following its recent performance, which has outpaced the broader utilities sector over the past 3 months. The company’s shares have climbed 14% during this period, sparking discussion about what is fueling the momentum.

See our latest analysis for Sempra.

Zooming out, Sempra’s momentum stands out compared to many utility peers, with a 13.6% 3-month share price return that continues a trend of steady growth. The stock’s 5-year total shareholder return of 65.6% highlights its ability to deliver for long-term investors. Recent gains also hint at optimism building around the company's outlook.

If this sort of sustained performance has you curious about other success stories in the market, now is a great time to broaden your perspective and discover fast growing stocks with high insider ownership

With Sempra’s shares racing ahead, the key question now is whether the stock is still trading below its intrinsic value or if the recent surge means all future growth has already been factored in. This could create a potential inflection point for investors.

Most Popular Narrative: 4.7% Undervalued

The current narrative places Sempra’s fair value at $96.53, slightly above its most recent closing price of $92. This signals room for potential upside if the company delivers on key growth drivers.

The rollout and completion of major LNG export projects (ECA Phase 1 nearing completion, Port Arthur Phase 1 advancing, and strong commercial momentum for Phase 2) positions Sempra to benefit from sustained global demand for U.S. LNG as a transition fuel. This could significantly increase future cash flows and long-term revenue generation.

Read the complete narrative.

What’s really powering that valuation? There is a bold bet riding on next-level infrastructure, revenue leaps, and rising profit margins. The numbers behind this price are anything but conservative. Curious what financial assumptions could justify this optimism? Only the complete narrative reveals the full story.

Result: Fair Value of $96.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory shifts or unexpected setbacks in capital recycling could quickly challenge Sempra’s bullish outlook and potentially cool recent optimism.

Find out about the key risks to this Sempra narrative.

Another View: Market Ratios Tell a Different Story

While the fair value narrative pegs Sempra as undervalued, market ratios suggest otherwise. The company’s price-to-earnings ratio sits at 28.5x, noticeably higher than both its peer average of 19.8x and the global industry’s 18.2x. Its ratio is also close to the fair ratio of 29.2x, a level the market could gravitate toward. Is the stock comfortably valued, or are investors accepting a premium for growth that may not fully materialize?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Sempra Narrative

If you want to challenge these views or put your own analysis to the test, it only takes a few minutes to build your own perspective. Do it your way

A great starting point for your Sempra research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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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.

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