Sempra Analyst Turns Bullish On Increased Focus On Texas

Sempra's (NYSE:SRE) management has increased focus on Texas, which "should drive earnings upside in the medium-term," according to Goldman Sachs.

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The Sempra Analyst: Analyst Carly Davenport upgraded the rating from Neutral to Buy, while raising the price target from $88 to $106.

The Sempra Thesis: The company's Texas utility, Oncor, seems well-positioned to benefit from growth in data center load in the region and "higher business, infrastructure and population growth in the state, Davenport said in the upgrade note.

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The utility is also poised to benefit from the "constructive" regulatory environment, he added.

Management has plans to increase capital investments by at least 30% in the Texas subsidiary and there is upside to this, the analyst stated.

"After reflecting the increased capital plan in Texas, we raise our Oncor expected EPS growth to ~21% in 2025-2029 up from 15% before, with the consolidated company’s EPS growth now at over 10% over the same period, compared to ~9.5% before," he further wrote.

SRE Price Action: Shares of Sempra had risen by 0.81% to $92.97 at the time of publication on Friday.

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• Sempra Sells Stake To Fund US Utility Growth

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