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Friday, September 22, 2023

Sempra Energy (NYSE:SRE) on the Path to Profitability

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Sempra Energy (SRE) shares are trading at higher $131.43 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $146.24.

To add more color to this target, the company’s high over the last year is $161.87 and the low is $88.00. Over the last 52 weeks, SRE is down -11.15% while the S&P 500 is up 18.49%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, SRE reported a profit of $410.0 million. Sempra Energy also saw revenues increase to $2.64 billion. In addition, SRE has free cash flow of -$1.68 billion as of 09-2020. The company’s EBITDA came in at $828.0 million which compares well with its peers.

SRE booked profit margins of 34.30%, its Return on Equity (ROE) is 20.00%, and its Return on Assets is 5.60%. All told, it is clear that, SRE needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. SRE has a short ratio of 2.90 and outstanding shares of 289.49M.

Company Outlook

SRE has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.51 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 6.27. Sempra Energy SRE also noted assets of $66.66 billion at the end of the last quarter. Investors should also keep an eye on sector updates as SRE has historically followed its peers on positive news.

All told, Sempra Energy SRE has strung together solid data and demonstrated underlying fundamentals. At its current valuation, SRE represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Sempra Energy SRE is now commanding a market cap of 38.35B and a float of 288.14M. SRE is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of SRE stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in SRE, either long or short, and we have not been compensated for this article.

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