Did Barclays’ Upgrade Just Shift Sempra’s (SRE) Long-Term Investment Narrative?

• Barclays recently upgraded Sempra to overweight, a move that has drawn considerable attention from investors and market participants.
• This analyst upgrade highlights growing confidence in Sempra’s long-term infrastructure and energy transition strategy within the utility sector.
• We’ll examine how the Barclays upgrade may influence investor sentiment and reshape Sempra’s broader investment narrative and risk outlook.

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Sempra Investment Narrative Recap

To be a Sempra shareholder, you need to believe in the company’s long-term strategy to capitalize on demand growth in Texas and the energy transition, balanced against regulatory and infrastructure risks. While the Barclays upgrade has generated optimism and may help strengthen near-term sentiment, it does not materially change the timeline or importance of regulatory shifts in California and Texas, which remain the primary catalysts and risks influencing Sempra’s outlook.

Of the company’s recent announcements, the updated 2025 EPS guidance, now expected in the US$3.29 to US$3.69 range with reaffirmed long-term growth targets, has the most direct relevance to investor focus on fundamentals. The fact that earnings are now projected to grow at 7 to 9 percent annually through 2029 signals management’s commitment to supporting long-term value, even as the business deals with cost pressures and capital allocation decisions.

However, if California or Texas regulators pursue more aggressive decarbonization or cost reforms, that risk to Sempra’s allowed returns is something investors should watch…

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

Sempra’s outlook anticipates $16.6 billion in revenue and $3.8 billion in earnings by 2028. This is based on a 7.6% annual revenue growth rate and a $1.1 billion increase in earnings from the current $2.7 billion level.

Uncover how Sempra’s forecasts yield a $90.46 fair value, in line with its current price.

Exploring Other Perspectives

Simply Wall St Community members provided three fair value estimates for Sempra, ranging from US$76.96 to US$90.46 per share. While these opinions vary, the main risk remains the potential for regulatory changes that could pressure the company’s returns, reminding you to consider different sources before making any decision.

Explore 3 other fair value estimates on Sempra – why the stock might be worth as much as $90.46!

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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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