SRE
Sempra
$81.93
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 35.4% above fair value
You pay
$81.93
Bear
$52.95
Fair
$60.52
Bull
$68.08
Bear
$52.95
-35.4%
$3.78 × 14x P/E
Fair
$60.52
-26.1%
$3.78 × 16x P/E
Bull
$68.08
-16.9%
$3.78 × 18x P/E
Adjust Assumptions
16.0x
3.78$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
21.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (26 analysts)
$97.00
Divergence from AlphaVal
38%
Summary
Applying a 16x P/E to adjusted EPS of $3.78, the base-case value is $60.52 per share.
Warnings
The company's reported profits differ from official accounting profits by 38%. Check what costs are being left out of the adjusted number.
The company pays out 95% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $97.00 (from 26 analysts). Our estimate is 38% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples