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Investing.com - UBS maintained its Neutral rating and $82.00 price target on Sempra Energy (NYSE:SRE) in a research note published Wednesday. According to InvestingPro data, the stock currently trades at $86.69, with a P/E ratio of 19.94x and offers a 3% dividend yield. The company has maintained dividend payments for 28 consecutive years.
The firm views Sempra’s announcement to sell down its stake in SI as a positive development for the company. UBS analyst William Appicelli noted the move reduces funding risk associated with supporting Oncor’s substantial capital expenditure opportunities. InvestingPro analysis shows the company currently maintains a Fair financial health rating, with particularly strong scores in price momentum and profitability metrics.
The transaction is also expected to improve Sempra Energy’s regulated earnings mix, according to the research note. The sale involves a 45% interest at a $10 billion valuation, implying an equity value of approximately $22.2 billion.
This valuation exceeds both UBS’s expectations and likely market expectations, which the firm believes were closer to $20 billion in equity value. The transaction’s valuation represents a premium to previous market estimates.
Sempra Energy anticipates the deal will generate average annual EPS accretion of $0.20 over a five-year period beginning in 2027, following the completion of the transaction.
In other recent news, Sempra Energy announced a significant asset sale, agreeing to sell 45% of Sempra Infrastructure Partners to KKR and CPP for $10 billion, or $11.6 billion including interest income. This transaction was valued at a 13.8x EV/EBITDA multiple, surpassing the 13.4x multiple from a previous 2021 sale. Following this announcement, Mizuho raised its price target for Sempra Energy to $93, maintaining an Outperform rating. Wolfe Research also increased its price target to $95, citing the company’s strong utility franchises in California and Texas. Additionally, California enacted the 2025 Wildfire Legislation, establishing a fund with up to $18 billion in liquidity for claims related to wildfires, with Sempra’s subsidiary San Diego Gas & Electric Company planning to participate. Furthermore, Sempra declared a quarterly dividend of $0.645 per share, payable in October 2025, alongside a semi-annual dividend on its preferred stock. These developments highlight ongoing strategic and regulatory moves impacting Sempra Energy.
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