Sempra (SRE) Earnings Keep Growth Hopes Alive As Valuation Debate Builds

Sempra (SRE) stock is back in focus after the company reported second quarter 2026 results with broadly steady sales, higher net income, and updated earnings guidance that reinforces its 2026 and 2027 outlook.

See our latest analysis for Sempra.

At a share price of $84.31, Sempra has seen its 30 day share price return decline 10.5% and its year to date share price return fall 6.0%, even as the 1 year total shareholder return of 7.2% and 5 year total shareholder return of 47.7% indicate that longer term gains are still intact.

If this earnings update has you thinking about other potential utility and infrastructure plays, it could be a good moment to scan 37 power grid technology and infrastructure stocks

Sempra is trading well below average analyst price targets after this pullback, even as earnings guidance and capital plans remain intact. Is the discount pointing to opportunity, or is the market simply pricing in the risks more harshly?

Most Popular Narrative: 18.5% Undervalued

At $84.31, Sempra is trading well below the most widely followed fair value estimate of $103.50, which is built on long term earnings and margin assumptions rather than short term trading moves.

Strong demand growth in Texas, driven by rapid population increases, urbanization, and large-scale electrification of industry and buildings (including massive data center and C&I load growth), is expected to require multi-billion capital investment in energy infrastructure, directly expanding Sempra's regulated rate base and supporting higher future revenues and earnings.

Read the complete narrative.

Want to see what happens when steady revenue assumptions meet a sharp profit margin reset and a lower future earnings multiple? The narrative joins those pieces into one valuation story.

The fair value of $103.50 uses a 7.1% discount rate and relies on a specific glide path for Sempra's revenue, earnings and future P/E multiple rather than current sentiment. Result: Fair Value of $103.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Sempra's heavy spending on regulated utilities and LNG projects could face regulatory shifts or weaker LNG demand, which may challenge the current 18.5% undervaluation narrative.

Find out about the key risks to this Sempra narrative.

Another View On Sempra Using Market Multiples

The analyst narrative points to Sempra being 18.5% undervalued at $84.31 based on long term earnings and margin assumptions. Yet on current numbers the stock trades on a P/E of 24.4x, which is higher than the global Integrated Utilities industry at 18.6x and above peer averages at 20.1x.

The fair ratio for Sempra is 26.2x P/E, only slightly above where the stock is today. That leaves less obvious room for upside if sentiment cools or estimates are revised. With one model flagging undervaluation and another hinting at a full price, which signal do you weigh more heavily as you set your own expectations?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If the split between optimism and caution around Sempra feels finely balanced, use the latest data to decide where you stand. To weigh both sides quickly and on your own terms, review the 2 key rewards and 3 important warning signs.

Looking for more investment ideas beyond Sempra?

Do not stop with Sempra. Use fresh data and clear filters to uncover other stocks that better match your goals for growth, income, or resilience.

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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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