Sempra (SRE): A Fresh Look at Valuation After Recent Share Price Movements

Sempra (SRE) shares have seen some movement lately, catching the attention of investors looking for steady utility sector plays. With recent performance data in hand, let us examine how Sempra is stacking up right now.

See our latest analysis for Sempra.

While Sempra’s share price has recently dipped 1.53% in the last day, the longer-term story is steadier. The 90-day share price return stands at 13.54%, and the 1-year total shareholder return is 1.24%, signaling some regained momentum after a quieter stretch.

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With Sempra trading nearly 8.5% below consensus analyst targets and recent gains building, investors face an important question: Is there real value left to be captured, or is the company’s future growth already priced in?

Most Popular Narrative: 6.7% Undervalued

Compared to the last close at $92.47, the narrative’s fair value estimate of $99.07 suggests there could still be meaningful upside for Sempra. The logic underpinning this valuation hinges on a blend of moderating growth forecasts and improved operating margins.

Legislative and regulatory changes in Texas (notably HB 5247 and the Unified Tracker Mechanism) are set to accelerate the recovery of capital invested in infrastructure, reducing regulatory lag and improving Oncor's earned ROE by 50 to 100 basis points, which should boost net margins over time.

Read the complete narrative.

Curious about which assumptions power this value call? From margin boosts to capital returns, the underlying projections might surprise you. Uncover the numbers shaping this narrative and see what gives Sempra that valuation edge.

Result: Fair Value of $99.07 (UNDERVALUED)

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

However, persistent wildfire threats in California and unforeseen regulatory shifts in key markets could quickly change Sempra's current growth outlook.

Find out about the key risks to this Sempra narrative.

Another View: Multiples Signal High Hurdles

Looking at share valuation through the lens of price-to-earnings, Sempra trades at 28.6x. This is well above both its industry peers at 19.7x and the global industry at 17.7x. The market’s fair ratio comes in even higher at 29.2x, intensifying pressure around today's lofty multiple. Could this mean future growth is already priced in, or is the premium justified?

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

Build Your Own Sempra Narrative

If you want to dig into the numbers and shape your own perspective, you can craft a custom narrative based on your research in just a few minutes. Do it your way

A great starting point for your Sempra research is our analysis highlighting 1 key reward and 4 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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