Taking Stock of Sempra (SRE): Assessing Valuation After Recent Share Price Cooling

Valuation backdrop and recent performance

Sempra (SRE) has quietly slipped about 4 % over the past month even as its past 3 months return remains positive, creating an interesting setup for investors watching regulated utility names.

See our latest analysis for Sempra.

At around $88.49, Sempra’s recent 7 day and 30 day share price declines contrast with a modestly positive year to date share price return and solid multi year total shareholder returns. This suggests momentum has cooled, while the longer term case remains intact.

If Sempra has you rethinking where steady returns might come from next, it could be worth exploring fast growing stocks with high insider ownership as another way to spot compelling stock ideas.

With Sempra now trading below analyst price targets despite resilient earnings growth, the key question becomes whether recent weakness reflects an overlooked value opportunity or if the market has already priced in its next leg of expansion.

Most Popular Narrative Narrative: 12.2% Undervalued

With Sempra last closing at $88.49 against a narrative fair value near $100.73, the story leans toward upside potential rather than downside risk.

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, significantly increasing future cash flows and long term revenue generation.

Read the complete narrative.

Want to see how robust earnings growth, expanding margins, and a future valuation multiple usually reserved for faster growth sectors all connect in one framework? Explore the full narrative to uncover the exact assumptions powering that upside view.

Result: Fair Value of $100.73 (UNDERVALUED)

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

However, ongoing regulatory shifts in core utility markets and heightened exposure to volatile global LNG demand could quickly challenge that upbeat earnings trajectory.

Find out about the key risks to this Sempra narrative.

Another Angle on Value

While the narrative fair value suggests upside, our DCF model paints a cooler picture. It puts Sempra’s value nearer $80.66 versus the current $88.49 share price. On that view, the stock looks a bit overvalued, raising the question of which story investors should trust.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Sempra for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 907 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Sempra Narrative

If you would rather dig into the numbers yourself and shape the story your way, you can build a full narrative in just 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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