Assessing Whether Sempra (SRE) Still Looks Undervalued After Recent Share Price Moves

Why Sempra (SRE) Is On Investors’ Radar Today

Sempra (SRE) is drawing fresh attention after recent share moves, with the stock showing a small 1 day decline, a wider pullback over the past week, but gains over the month and past 3 months.

See our latest analysis for Sempra.

At a share price of $93.15, Sempra’s recent 7 day share price pullback sits against a 30 day gain of 1.56% and a 90 day share price return of 8.34%, while its 1 year total shareholder return of 32.75% highlights stronger longer term momentum.

If you are comparing Sempra with other utilities and energy infrastructure names, this can be a useful moment to scan 33 power grid technology and infrastructure stocks

With Sempra trading at $93.15 and a published price target of $104.47, the key question is whether recent gains still leave room for upside or if the market is already pricing in future growth.

Most Popular Narrative: 10.5% Undervalued

At $93.15, the most followed narrative puts Sempra’s fair value closer to $104.13, using a detailed long term earnings and cash flow framework.

Analysts expect earnings to reach $4.0 billion (and earnings per share of $6.05) by about April 2029, up from $1.8 billion today. In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 21.2x on those 2029 earnings, down from 34.2x today.

Read the complete narrative.

Curious what underpins that higher fair value estimate? The narrative leans on measured revenue growth, a sharp margin reset, and a future earnings multiple that still compresses from today’s level.

Result: Fair Value of $104.13 (UNDERVALUED)

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

However, heavier spending on utilities and LNG projects, along with regulatory or extreme weather shocks, could pressure earnings and challenge the current view that the stock is undervalued.

Find out about the key risks to this Sempra narrative.

Another Way To Look At Valuation

The margin based fair value narrative paints Sempra as 10.5% undervalued, but the current P/E of 33.9x tells a different story. That is well above the global integrated utilities average of 19.2x, the peer average of 20x, and even a fair ratio estimate of 28.4x, suggesting meaningful valuation risk if sentiment cools.

For a closer look at how these valuation gaps stack up against fundamentals, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With mixed signals on valuation and sentiment, this is a good time to check the underlying data yourself and decide how you feel about the balance of risks and rewards, starting with the 1 key reward and 3 important warning signs

Looking For More Investment Ideas?

If Sempra has your attention, do not stop here. Broaden your watchlist with other ideas that match your goals using focused stock lists built from hard numbers.

• Target potential mispricing by scanning 58 high quality undervalued stocks that combine quality fundamentals with valuations that may not fully reflect their underlying metrics.
• Lock in income ideas by reviewing 13 dividend fortresses that offer higher yields while still emphasizing business resilience.
• Dial down risk by checking 72 resilient stocks with low risk scores built around companies with more resilient balance sheets and business profiles.

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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