BMO raises Sempra Energy stock target to $81, keeps Outperform rating

On Monday, BMO Capital Markets adjusted its outlook on Sempra Energy (NYSE:SRE), increasing the price target to $81 from the previous $78 while maintaining an Outperform rating on the company’s shares. Currently trading at $75.42, the stock sits between its 52-week range of $61.90 to $95.77. The upgrade follows Sempra Energy’s first-quarter earnings per share (EPS) for 2025, which surpassed both BMO’s and consensus estimates, coming in at $1.44 compared to the anticipated $1.35 and $1.34, respectively.InvestingPro analysis shows the company currently trades at a P/E ratio of 16.55, with additional metrics available for deeper valuation analysis.

The energy services holding company, with a market capitalization of $49.19 billion, reaffirmed its guidance ranges for 2025 and 2026, projecting EPS to be between $4.30 and $4.70 for 2025, and between $4.80 and $5.30 for 2026. Additionally, Sempra Energy confirmed its forecast for a compound annual growth rate (CAGR) of 7-9% for EPS from 2025 through 2029. While the growth is not expected to be linear throughout the forecasted period, management emphasized their expectation that growth leading into 2029 should reach or exceed the higher end of this range. According to InvestingPro, the company has maintained dividend payments for 28 consecutive years, with a current dividend yield of 3.42%.

The positive outlook for Sempra Energy does not take into account any potential benefits from asset recycling or the more than $12 billion in capital expenditure opportunities at Oncor, one of its subsidiaries. BMO Capital’s analyst highlighted the company’s active schedule leading into August and the focus on execution as key points of interest for investors.

The sum-of-the-parts (SOTP) and mark-to-market (M-T-M) analysis led to the revised target price of $81. This endorsement from BMO Capital Markets reflects confidence in Sempra Energy’s strategic plans and its ability to deliver consistent growth over the coming years.

In other recent news, Sempra Energy reported its Q1 2025 earnings, revealing an adjusted EPS of $1.44, which surpassed analysts’ expectations of $1.35. However, the company’s revenue of $3.8 billion fell short of the anticipated $3.87 billion. Despite the revenue miss, Sempra Energy reaffirmed its full-year 2025 adjusted EPS guidance of $4.30-$4.70. The company plans significant investments, with $13 billion targeted for infrastructure, focusing heavily on U.S. utilities. Notably, Sempra Energy is also involved in asset sales, including a minority interest in Sempra Infrastructure Partners, to optimize its portfolio. The company maintains a strategic focus on regulated utility earnings, particularly in Texas and California. Additionally, Sempra Energy’s long-term EPS compound annual growth rate is projected at 7-9% from 2025 to 2029. These developments highlight Sempra Energy’s efforts to maintain financial stability and growth.

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