Pomerantz LLP’s investigation into Sempra (SRE) following its February 2025 earnings miss and reduced 2025 guidance has put the stock under closer scrutiny for potential securities law issues.
See our latest analysis for Sempra.
Against the backdrop of the earnings miss and legal scrutiny, Sempra’s share price has still produced a 90 day share price return of 8.93% and a 1 year total shareholder return of 39.03%. This suggests that recent momentum has been building from a stronger long term base.
If you are watching how utilities and infrastructure stories evolve, it can also be useful to see what else is moving in the energy space through our 26 power grid technology and infrastructure stocks
So with Sempra trading at US$95.04, showing a 39.03% 1 year total return, an intrinsic discount flag of 63.62% and only a 7.59% gap to analyst targets, are you looking at value still on the table, or a market already pricing in future growth?
Most Popular Narrative: 6.4% Undervalued
On the most followed view of Sempra, a fair value of $101.50 sits above the current $95.04 share price, framing the recent rally in a different light.
Analysts expect earnings to reach $3.8 billion (and earnings per share of $5.66) by about September 2028, up from $2.7 billion today. In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.3x on those 2028 earnings, down from 19.6x today.
Want to understand why this valuation leans on earnings power, not just revenue? The narrative hinges on profit margins, capital intensity and how investors might price those future cash flows.
Result: Fair Value of $101.50 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this hinges on regulatory support and execution. Setbacks around wildfire or extreme weather costs, or LNG demand and policy shifts, could quickly challenge that earnings focused story.
Find out about the key risks to this Sempra narrative.
Another View: Multiples Point To A Richer Price
Those earnings based fair value estimates sit alongside a very different signal from simple P/E maths. At $95.04, Sempra trades on 34.6x earnings, compared with 18.7x for the global integrated utilities group, a 20.7x peer average and a fair ratio of 32.1x that the market could move towards.
That kind of premium can reflect confidence in Sempra's future earnings path, but it also raises the risk that any slip in delivery or sentiment hits a higher starting valuation. The key question is how comfortable you are paying up for this story when peers sit on lower multiples.
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
The mix of legal questions, valuation tension and recent share price strength has created a split view. It makes sense to check the data for yourself while the story is still moving and decide where you stand based on both the upside and the risks that matter most to you, starting with these 2 key rewards and 4 important warning signs.
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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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