On Wednesday, BMO (TSX:BMO) Capital Markets adjusted its outlook on Sempra Energy (NYSE:SRE), increasing the price target to $86 from the previous $84, while maintaining an Outperform rating on the stock. The adjustment follows Sempra Energy's first-quarter 2024 earnings per share (EPS) report, which met the expectations set by both BMO and consensus estimates.
Sempra reported a Q1 2024 EPS of $1.34, aligning with the $1.33 to $1.34 range anticipated by analysts. This figure, however, represents a decrease from the $1.46 EPS reported in the same quarter of the previous year. Despite this year-over-year decline, the company's management reaffirmed its full-year 2024 guidance, projecting earnings between $4.60 and $4.90. This outlook is consistent with BMO's estimate at the high end of $4.90 and slightly above the consensus estimate of $4.81.
The firm also reiterated its expectations for Sempra's performance in 2025, forecasting an EPS range of $4.90 to $5.25. BMO's projection for 2025 slightly exceeds the consensus, aiming for $5.28 compared to the average estimate of $5.16. The analyst from BMO Capital Markets noted that the updated price target reflects a revision in the utility group multiples used within their sum-of-the-parts (SOTP) valuation framework.
BMO's estimates for Sempra's earnings in the coming years remain unchanged, with expectations set at $4.90 for 2024, $5.28 for 2025, and $5.63 for 2026. The firm's continued Outperform rating indicates a positive outlook on Sempra Energy's stock performance relative to the market.
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