Analysts Slash Sempra Targets to $89 and $100 on SoCalGas Fire Litigation Risk
Jefferies cut Sempra’s price target to $89 from $95 after legal challenges over SoCalGas’s Eaton fire response increased California operational risks and triggered downward regulatory and capital cost assumptions. BMO Capital trimmed its target to $100 from $103, citing investor skepticism until the litigation defense is filed.
1. Jefferies Cuts Target to $89
On January 26 Jefferies analyst Julian Dumoulin-Smith lowered his Sempra price target from $95 to $89 and maintained a Hold recommendation, citing heightened operational risks following new legal challenges against SoCalGas over its Eaton fire response.
2. BMO Capital Trims Target to $100
On January 22 BMO Capital analyst James Thalacker reduced his target from $103 to $100 while reaffirming an Outperform rating, attributing the recent stock decline to what he perceives as an overreaction to Southern California Edison’s lawsuit and forecasting lingering investor skepticism until defense filing.
3. Legal Challenges Increase Operational Uncertainty
The Eaton fire litigation introduces potential liability for SoCalGas, prompting revisions to California capital cost assumptions and track two regulatory outcomes, as over a dozen defendants face similar claims and initial damage costs are incorporated into analyst models.
4. Sempra’s California Utility Business
Sempra serves nearly 40 million consumers with electricity and natural gas across North America and operates one of the largest energy networks, making its California unit’s legal outlook and regulatory environment critical to its overall valuation and future earnings.