Sempra Energy (SRE) has a median target price of $126.6 compared to its current market price of $111.8, which indicates an upside potential of 13.3% for the next 12 months. JPMorgan Chase cut SRE’s target price from $121.0 to $118.0 on January 14.
Among the 12 analysts that track Sempra Energy, five have given it “strong buys,” four have given it “buys,” and three have given it “holds.” No analysts have given it “sells” as of January 15.
The chart above shows how analysts’ views on Sempra Energy stock have changed in the last few months. Sempra Energy stock hasn’t had any “sell” recommendations for at least a year.
Sempra Energy, the largest utility by market cap in California, is currently trading at a forward PE ratio of above 18x. Sempra Energy’s presence in the most populous states, such as California and Texas, is a big positive for its stock. Analysts expect robust growth in its earnings compared to 2018. Its five-year average historical valuation is ~20x. Thus, Sempra looks attractive compared to its peers and its historical valuation.
In the last five years, Sempra Energy has raised its dividend by more than 7%, surpassing many of its peers (XLU). Sempra Energy stock is currently trading at a dividend yield of 3.1%, lower than its peers’ yields. Its expected superior earnings growth for the next few years will likely continue to drive above-average dividend growth.