Wall Street Turns Bullish on Sempra Energy: Wells Fargo Sets $115 Price Target

Sempra (NYSE:SRE | SRE Price Prediction) is getting a fresh look from Wall Street. Wells Fargo analyst Shahriar Pourreza added Sempra to the firm’s Q2 Tactical Ideas List with an Overweight rating and a $115 price target. The call is built on a clear thesis: the story has cleaned up, and the catalysts to re-rate higher are now lining up.

The Analyst’s Case

Coming off non-deal roadshows following Q4 updates, Pourreza noted that prior underperformance has given way to a cleaner story, with regulatory clarity, the Sempra Infrastructure Partners sale credit review, and Oncor load filings paving the way for midyear updates. The firm sees these as sequential catalysts capable of driving continued multiple expansion.

Wells Fargo’s $115 price target sits at a premium to the broader analyst consensus of $102.69, signaling above-consensus conviction. That gap reflects the firm’s view that the market has not yet fully priced in the business simplification underway.

Company Snapshot

Sempra operates through subsidiaries including San Diego Gas & Electric, SoCalGas, an 80.25% stake in Oncor, Sempra Infrastructure, and Ecogas, serving nearly 40 million consumers. The company reported full-year 2025 adjusted EPS of $4.69, beating the estimate of $4.603, with Q4 2025 adjusted EPS of $1.28 beating the $1.23 estimate by 4%.

The five-year capital plan of approximately $65 billion (2026–2030), up from $56 billion, directs over 95% toward regulated utility investments in Texas and California. Oncor is the growth engine: Q4 2025 Texas segment earnings reached $201 million versus $135 million in Q4 2024, with an interconnection queue of approximately 210 GW from data centers alone.

Why the Move Matters Now

Two pending transactions are central to the re-rating case. The sale of a 45% equity stake in Sempra Infrastructure Partners to KKR for $10 billion and the sale of Ecogas México for approximately $500 million are both expected to close in Q2–Q3 2026 and are projected to be EPS-accretive and credit-enhancing. Closing those deals removes complexity and redirects capital toward the regulated utility core.

EPS guidance supports the earnings growth story: 2026 adjusted EPS is guided to $4.80–$5.30, rising to $5.10–$5.70 in 2027 and $6.70–$7.50 by 2030, with a long-term EPS CAGR target of 7%–9% (2025–2029), guided to the high end or above. Shares trade near $98.18 against a forward P/E of 17x, well below the trailing multiple.

What It Means for Your Portfolio

CEO Jeff Martin framed the strategy directly: “We took important steps in 2025 to simplify our business, improve capital efficiency and strengthen our balance sheet.” For long-term investors, the combination of regulated utility earnings growth, a rising dividend (annualized $2.63 per share, up from $2.58), and two near-term transaction catalysts makes Sempra worth monitoring closely. Key risks remain: California wildfire liability, regulatory disallowances, and the possibility that the KKR and Ecogas transactions face delays in receiving regulatory approvals. If those deals close on schedule, the Wells Fargo upgrade thesis gains its clearest validation.