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Mizuho Analyst Increases Sempra (SRE) Price Target by 8.9% to $86

By Don Francis, Editor
May 18, 2024 9:59 AM UTC
Mizuho Analyst Increases Sempra (SRE) Price Target by 8.9% to $86

Mizuho's Anthony Crowdell raised their price target on Sempra (NYSE: SRE) by 8.9% from $79 to $86 on 2024/05/17. The analyst maintained their Strong Buy rating on the stock.

In a note reviewing "the three California" utilities, Crowdell said they made their price target move "to reflect higher market multiples." The analyst explained that although the Q1 2024 earnings cycle was challenging for the California utilities, "all three have large valuation gaps and supportive California regulation."

For Q1 2024, Sempra Energy reported earnings per share (EPS) of $1.34, which missed the Zacks Consensus Estimate of $1.35 and, by 8.2%, Q1 2023's $1.46. Revenue for the quarter came in at $3.64 billion, missing the Zacks Consensus Estimate by 41.04% and, by 44.5%, Q1 2023's $6.56 billion.

Looking ahead, Sempra Energy management provided guidance for FY 2024. They updated the GAAP EPS range to $4.52 to $4.82 based on Q1's actual results. The adjusted EPS range remained unchanged at $4.60 to $4.90. For FY 2025, the company maintained the EPS range of $4.90 to $5.25. Management also reiterated its long-term EPS growth rate of 6% to 8%.

Sempra Energy's Chairman & CEO, Jeffrey W. Martin, expressed optimism about the company's performance in 2024. He noted, "At Sempra, we are off to a great start in 2024. We are seeing strong economic growth in our core markets with increased interest in renewables, electric vehicles, digital infrastructure, and the continued electrification of the economy. Our infrastructure-centered strategy has us well positioned to continue modernizing and expanding the energy grid to help meet the needs of our customers."

In addition to the rating change for Sempra Energy, Mizuho's Anthony Crowdell also adjusted their price targets for other companies in their portfolio. They raised their price target on Aes Corp by 14.3%, from $21 to $24, while maintaining their Strong Buy rating. They also increased their price target on Edison International by 13.3%, from $75 to $85, and maintained the Strong Buy rating.

As of the latest data, 85.7% of top-rated analysts currently rate SRE as a Strong Buy or Buy, while 14.3% see it as a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that SRE's upcoming year will deliver earnings per share (EPS) of $4.78. If the analysts' predictions hold true, SRE's next yearly EPS will be up by 5.5% year-over-year.

Since Sempra Energy's latest quarterly report on 2024/05/07, the stock price has seen a 5.6% increase. Year-over-year, the stock is up 6.5%. However, during that same period, SRE has trailed the S&P 500, which has risen by 27.5%.

Mizuho analyst Anthony Crowdell is ranked by WallStreetZen in the top 13% out of 4,587 Wall Street analysts. They have an average return of 7.5% and a 53.4% win rate. Crowdell specializes in the Utilities and Technology sectors.

Sempra Energy, founded in 1998, is an energy services company headquartered in San Diego, CA. Its subsidiary, San Diego Gas & Electric Company, provides electric services to 3.6 million users and natural gas to 3.3 million users. Sempra's Southern California Gas Company segment owns and operates a natural gas distribution, transmission, and storage system that supplies natural gas to approximately 22 million people across a 24,000 square mile area.

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