Sempra’s price targets
According to Wall Street analysts, Sempra Energy (SRE) has a higher upside than its peer utilities, with an estimated upside of 9% and a price target of $120. On August 4, 2016, SRE was trading at $110.30.
Of the 17 analysts tracking Sempra, none have “sell” recommendations on the stock. Ten analysts have issued “buy” ratings for Sempra, and seven have recommended “hold” ratings on the stock.
As for Sempra’s peers, analysts expect upsides in the range of 6%–8% over the next year. Edison International (EIX) has a one-year price target of $80, which implies a possible upside of 5%. EIX was trading at $76.23 on August 4, 2016.
Pacific Gas & Electric (PCG) has a one-year price target of $67.89, which implies an estimated upside of 5%. It’s trading at $64.51.
Sempra Energy: Outlook
Sempra Energy’s management has provided earnings guidance range of $4.60–$5.00 per share for 2016. The downward guidance compared to 2015 offered by its management shows that the slowing demand for energy could continue to dent its earnings in 2016.
Sempra Energy is one of the most diversified US utilities. Its operations are spread beyond California over Latin America and Mexico. Its business mix of electric, gas, and midstream bodes well for its long-term growth.
Sempra’s earnings growth is expected to accelerate once its Cameron LNG export facility comes operational in 2019. Its long-term earnings growth of 12% is nearly double than the industry average.