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Sempra Poised for Strong Growth on Infrastructure and LNG Expansion
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Key Takeaways
Sempra invests heavily in infrastructure and LNG projects to support rising electricity demand.
SRE plans $65B in capex through 2029, boosting transmission, distribution and export capacity.
Counterparty risks and tariffs on imports could impact costs, revenues and project execution.
Sempra (SRE - Free Report) benefits from systematic investments in infrastructure development, enabling it to meet rising electricity demand and better serve customers. Strong returns on these investments are expected to drive long-term earnings growth at the high end or above its 7-9% target range through 2030.
However, this Zacks Rank #3 (Hold) company faces risks from counterparty defaults and exposure to tariffs and foreign supply chains, which could pressure its financial performance.
Factors Acting in Favor of SRE
Sempra is well positioned with its strategically located opportunities in North America, with the United States being the leading exporter of LNG worldwide. Sempra Infrastructure’s LNG business line remains focused on securely delivering natural gas to the world in support of the energy transition.
It is currently developing a handful of natural gas liquefaction export projects. As of December 2025, the company made steady progress in construction at its ECA LNG Phase 1 and Port Arthur LNG Phase 1 projects. Its ECA LNG Phase 1 project, with a nameplate export capacity of approximately 3 million tons per annum (Mtpa) of LNG, has reached mechanical completion. Sempra expects to reach completion in the spring of 2026.
Sempra is systematically investing in infrastructure to support rising electricity demand, driven in part by the rapid expansion of AI-driven data centers across the United States. A majority of SRE’s capital expenditures are targeted toward improving the company’s transmission and distribution generation. During 2025, the company invested $13 billion, which was used for transmission and distribution improvements at its regulated public utilities, with more than $10 billion toward its growing U.S. utilities. The company plans to invest $65 billion during the 2026-2029 period, indicating a 17% increase from the previous year’s plan.
Challenges Faced by SRE
Sempra Infrastructure faces risks from doing business with PEMEX and CFE, Mexican state-owned enterprises, including concerns over their financial solvency, government regulation, and the possibility that they may not meet contractual obligations. Any delay or default in payment of the company’s counterparties’ financial obligations could result in its recording of a provision for credit losses on past due receivable balances and lower revenues.
SRE faces risks related to its reliance on imported materials and foreign-sourced goods, as well as its LNG exports to international markets. Tariffs imposed by the U.S. government may increase project costs and affect the affordability of projects under development.
SRE’s Share Price Performance
In the past six months, shares of the company have risen 15.6% compared with the industry’s 15.2% growth.
The Zacks Consensus Estimate for NNE’s fiscal 2026 earnings per share (EPS) implies a decline of 32.1% year over year. The company delivered an average negative earnings surprise of 71.7% in the last four quarters.
SSL’s long-term (three to five years) earnings growth rate is 7.1%. The Zacks Consensus Estimate for SSL’s fiscal 2026 EPS implies a decline of 15.5% year over year.
The Zacks Consensus Estimate for OIS’ 2026 EPS implies an improvement of 59.5% year over year. It delivered an average earnings surprise of 4.6% in the last four quarters.
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Sempra Poised for Strong Growth on Infrastructure and LNG Expansion
Key Takeaways
Sempra (SRE - Free Report) benefits from systematic investments in infrastructure development, enabling it to meet rising electricity demand and better serve customers. Strong returns on these investments are expected to drive long-term earnings growth at the high end or above its 7-9% target range through 2030.
However, this Zacks Rank #3 (Hold) company faces risks from counterparty defaults and exposure to tariffs and foreign supply chains, which could pressure its financial performance.
Factors Acting in Favor of SRE
Sempra is well positioned with its strategically located opportunities in North America, with the United States being the leading exporter of LNG worldwide. Sempra Infrastructure’s LNG business line remains focused on securely delivering natural gas to the world in support of the energy transition.
It is currently developing a handful of natural gas liquefaction export projects. As of December 2025, the company made steady progress in construction at its ECA LNG Phase 1 and Port Arthur LNG Phase 1 projects. Its ECA LNG Phase 1 project, with a nameplate export capacity of approximately 3 million tons per annum (Mtpa) of LNG, has reached mechanical completion. Sempra expects to reach completion in the spring of 2026.
Sempra is systematically investing in infrastructure to support rising electricity demand, driven in part by the rapid expansion of AI-driven data centers across the United States. A majority of SRE’s capital expenditures are targeted toward improving the company’s transmission and distribution generation. During 2025, the company invested $13 billion, which was used for transmission and distribution improvements at its regulated public utilities, with more than $10 billion toward its growing U.S. utilities. The company plans to invest $65 billion during the 2026-2029 period, indicating a 17% increase from the previous year’s plan.
Challenges Faced by SRE
Sempra Infrastructure faces risks from doing business with PEMEX and CFE, Mexican state-owned enterprises, including concerns over their financial solvency, government regulation, and the possibility that they may not meet contractual obligations. Any delay or default in payment of the company’s counterparties’ financial obligations could result in its recording of a provision for credit losses on past due receivable balances and lower revenues.
SRE faces risks related to its reliance on imported materials and foreign-sourced goods, as well as its LNG exports to international markets. Tariffs imposed by the U.S. government may increase project costs and affect the affordability of projects under development.
SRE’s Share Price Performance
In the past six months, shares of the company have risen 15.6% compared with the industry’s 15.2% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the same industry are Nano Nuclear Energy Inc. (NNE - Free Report) , Sasol (SSL - Free Report) and Oil States International (OIS - 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.
The Zacks Consensus Estimate for NNE’s fiscal 2026 earnings per share (EPS) implies a decline of 32.1% year over year. The company delivered an average negative earnings surprise of 71.7% in the last four quarters.
SSL’s long-term (three to five years) earnings growth rate is 7.1%. The Zacks Consensus Estimate for SSL’s fiscal 2026 EPS implies a decline of 15.5% year over year.
The Zacks Consensus Estimate for OIS’ 2026 EPS implies an improvement of 59.5% year over year. It delivered an average earnings surprise of 4.6% in the last four quarters.