How Sempra’s (SRE) Updated Guidance and Q2 Results May Shift Its Investment Narrative

• Earlier this month, Sempra updated its full-year 2025 and 2026 earnings guidance and reaffirmed its long-term projected EPS compound annual growth rate, while also reporting second quarter results showing revenue of US$3.00 billion and net income of US$472 million.
• A key insight is that while the company expects higher earnings in 2026, its second quarter net income and earnings per share declined compared to the previous year.
• With Sempra reaffirming its long-term earnings growth guidance, let's explore how these updates may influence the company's investment narrative.

Find companies with promising cash flow potential yet trading below their fair value.

Sempra Investment Narrative Recap

To be a Sempra shareholder, you need confidence in the company’s ability to grow regulated utility earnings while managing risks from policy, regulatory changes, and its evolving capital mix. The recent update to 2025 and 2026 earnings guidance reaffirms the long-term growth target, but the near-term catalyst, Texas infrastructure expansion, remains largely unaffected, while weaker Q2 net income highlights ongoing exposure to volatility and regulatory headwinds. The biggest risk continues to be adverse legislative or regulatory shifts, especially those affecting allowed returns in key states.

The August 2025 guidance update, projecting EPS of US$4.05 to US$4.45 for 2025 and US$4.80 to US$5.30 for 2026, is the most relevant recent announcement. By confirming its 7% to 9% annual EPS growth target, Sempra sought to reinforce its long-term growth outlook amid short-term earnings fluctuations and the complex, evolving backdrop of regulatory and capital allocation risks.

Still, against this long-term guidance, investors should be aware that if more aggressive decarbonization measures or cost-of-capital changes emerge in California or Texas…

Read the full narrative on Sempra (it's free!)

Sempra's outlook anticipates $16.8 billion in revenue and $3.8 billion in earnings by 2028. This projection is based on an annual revenue growth rate of 8.0% and represents a $1.1 billion increase in earnings from the current $2.7 billion.

Uncover how Sempra's forecasts yield a $82.88 fair value, in line with its current price.

Exploring Other Perspectives

Sempra’s fair value estimates from the Simply Wall St Community span US$76.73 to US$90.27 based on three independent views. With regulatory risks surrounding future returns on capital, you can see how sharply assessments of Sempra’s prospects can vary.

Explore 3 other fair value estimates on Sempra - why the stock might be worth as much as 9% more than the current price!

Build Your Own Sempra Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Sempra research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Sempra research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sempra's overall financial health at a glance.

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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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