Big Move: Sempra Energy Agrees to Buy Oncor

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Part 5
Big Move: Sempra Energy Agrees to Buy Oncor PART 5 OF 5

Sempra Energy’s Price Targets and Analysts’ Recommendations


Sempra Energy (SRE) is one of the fastest-growing utilities in the country. It aims to grow its earnings per share 10%–11% for the next few years. Utilities at large target average earnings growth of 4%–6%. Sempra Energy’s management expects its earnings growth to accelerate in 2018 once the Oncor acquisition is completed. Its higher earnings growth will likely bode well for its dividend growth.

Sempra Energy’s large regulated operations and long-term, future contracted cash flows place it well for relatively stable earnings and dividend growth.

Sempra Energy’s Price Targets and Analysts&#8217; Recommendations

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Price targets

According to analysts’ estimates, Sempra Energy has an estimated gain potential of just 1.2%—compared to its price target of $119.77. Currently, it’s trading at $118.40.

The above chart shows how analysts’ views on Sempra Energy changed in the last six months. As of August 22, 2017, among the 15 analysts tracking Sempra Energy, five recommended it as a “strong buy,” while four recommended it as a “buy.” Currently, six analysts rate Sempra Energy stock as a “hold.” It should be noted that despite Sempra Energy’s epic rally in the last few months and its premium valuation, none of the analysts have rated the stock as a “sell.”

According to Wall Street analysts’ consensus, Sempra Energy’s bigger peer, PG&E (PCG) has a price target of $70.28, which implies an estimated upside of 1.3% going forward. Currently, it’s trading at $69.35.

Edison International (EIX) has a price target of $83.66—compared to its current market price of $79.78. It implies a potential gain of 5%.

To learn about top utilities’ price targets and analysts’ recommendations, read Southern Company: Analyst Recommendations, Outlook, and More.

For a comparative analysis of the highest yielding utility stocks among the S&P 500 Utilities Index (XLU), read High-Dividend SPX Utilities Today: A Toe-to-Toe Analysis.


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