Sempra Energy price target raised to $93 from $86 at Mizuho on SIP sale

Investing.com - Mizuho raised its price target on Sempra Energy (NYSE:SRE) to $93.00 from $86.00 on Wednesday, maintaining an Outperform rating following the company’s announcement of a significant asset sale. Currently trading at $86.05, Sempra has demonstrated remarkable stability with a beta of 0.66, and according to InvestingPro data, the stock generally trades with low price volatility.

Sempra announced Tuesday it will sell 45% of Sempra Infrastructure Partners (SIP) to KKR and CPP for $10 billion, or $11.6 billion including interest income, at a 13.8x EV/EBITDA multiple. This valuation exceeds the 13.4x multiple from the company’s 2021 sell-down. For context, InvestingPro analysis shows Sempra’s current EV/EBITDA stands at 15.23x, with the company maintaining a solid market capitalization of $56.15 billion.

The company also announced a final investment decision on Port Arthur 2, with a commercial operation date expected in 2030/31. Management plans to use the cash proceeds from the SIP transaction to fund growth at Oncor.

Sempra estimates the transaction will be accretive to earnings per share by approximately $0.20 in mid-2026 and will improve credit metrics by 50 basis points. Mizuho expects credit rating agencies to lower Sempra’s downgrade threshold from 15% (S&P) and 14.75% (Moody’s) to below 14%.

The firm maintained its Outperform rating on Sempra stock as the company continues to shift toward a fully regulated business model, with a fourth-quarter capital update anticipated. InvestingPro data reveals the company has raised its dividend for 14 consecutive years, maintaining a 3% yield, reflecting strong financial discipline. Get access to additional insights and detailed analysis with InvestingPro’s comprehensive research report, available for over 1,400 US stocks including Sempra Energy .

In other recent news, Sempra Energy has seen several key developments. Wolfe Research raised its price target for Sempra Energy to $95, maintaining an Outperform rating, citing the company’s strong utility franchises in California and Texas. Additionally, California’s enactment of Senate Bill 254, known as the 2025 Wildfire Legislation, introduces the Wildfire Fund Continuation Account, providing up to $18 billion in additional liquidity for wildfire claims. This fund aims to support large California electric investor-owned utilities, including Sempra’s subsidiary, San Diego Gas & Electric Company, which plans to participate.

Moreover, Sempra announced a quarterly dividend of $0.645 per share on its common stock, payable in October 2025, and a semi-annual dividend on its preferred stock. The news of the $18 billion wildfire fund also coincided with a rise in Sempra’s stock, along with other utility companies like PG&E Corporation and Edison International. These developments reflect significant financial and regulatory changes impacting Sempra Energy and its operations.

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