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Sempra Energy Gains From LNG Expansion and Major Investments

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Key Takeaways

  • Sempra Energy targets rising demand with $13B in 2025 upgrades and expects strong rate base growth.
  • The company advances LNG projects and expands wind, solar and rooftop solar capacity.
  • Sempra Energy could be negatively impacted if counterparties fail to meet contractual obligations.

Sempra Energy ((SRE - Free Report) ) benefits from strategic investments that strengthen operational reliability and support efficient customer service. The company is also stepping up its efforts to grow its renewable energy portfolio.

However, this Zacks Rank #3 (Hold) company faces risks from wildfires.

Key Growth Catalysts for SRE

Sempra Energy is steadily ramping up infrastructure investments to meet rising electricity demand, fueled in part by the rapid growth of AI data centers across the United States. The company plans to invest $13 billion in 2025, primarily in transmission and distribution upgrades at its regulated utilities. It also expects capital investments to increase about 30% over 2026-2029. These initiatives are designed to reinforce its infrastructure, enhance service efficiency for customers and support projected rate base growth of about 10% annually through 2025-2029.

SRE is well-positioned with strategically located opportunities across North America as global LNG demand continues to rise. Sempra Infrastructure is advancing several natural gas liquefaction export projects. As of September 2025, the company has made solid construction progress on both its ECA LNG Phase 1 and Port Arthur LNG Phase 1 projects.

Sempra Energy is ramping up efforts to grow its renewable energy portfolio, aiming to capture both the economic and environmental, social and governance incentives offered by the utility-scale renewable energy market. As of Dec. 31, 2024, Sempra Infrastructure had 1,044 megawatts (MW) of fully contracted nameplate capacity from its operating wind and solar facilities. In addition, residential and commercial rooftop solar capacity within SDG&E’s service area totaled 2,318 MW at year-end 2024.

Potential Risks for SRE Stock

In recent years, California has faced some of its most severe wildfires. These events can trigger temporary power outages in the service areas of SDG&E and SoCalGas, and may also damage Sempra Energy’s electric and natural gas infrastructure, leading to significant losses.

Sempra Infrastructure faces risks tied to its business dealings with PEMEX and the CFE, Mexico’s state-owned enterprises, including concerns over their financial stability, government regulation and the possibility that they may not fulfill contractual obligations. If any of Sempra’s counterparties fail to perform as agreed, it could negatively affect the company’s operations and financial condition.

SRE Stock Price Movement

In the past six months, Sempra Energy shares have risen 20.4% compared with the industry’s growth of 17.1%.

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Stocks to Consider

Some better-ranked stocks from the same sector are Spire Inc. ((SR - Free Report) ), Atmos Energy Corp. ((ATO - Free Report) ) and IDACORP, Inc. ((IDA - Free Report) ), each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SR’s long-term (three to five years) earnings growth rate is 10.54%. The Zacks Consensus Estimate for its fiscal 2026 earnings per share (EPS) is pinned at $5.18, which indicates a year-over-year increase of 16.7%.

ATO’s long-term earnings growth rate is 7.98%. The Zacks Consensus Estimate for its fiscal 2026 earnings per share is pegged at $8.02, which suggests a year-over-year jump of 7.5%.

IDA’s long-term earnings growth rate is 8.01%. The Zacks Consensus Estimate for its 2025 EPS is pegged at $5.85, which implies a year-over-year rise of 6.4%.


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