Morgan Stanley analyst David Arcaro maintained a Buy rating on Sempra Energy (SRE – Research Report) today and set a price target of $85.00.
David Arcaro has given his Buy rating due to a combination of factors that highlight Sempra Energy’s potential for growth despite recent challenges. The company’s performance in Texas remains a strong point, driven by robust data center activity and industrial growth, which are expected to contribute to significant earnings growth. Although Sempra has faced setbacks such as increased interest expenses and delays in infrastructure projects, these are seen as temporary hurdles.
Arcaro believes the market reaction to Sempra’s lowered earnings guidance was excessive, and he sees a substantial upside potential from the current stock price. The revised price target, while lower than before, still reflects a positive outlook with a 20% potential increase. Additionally, upcoming catalysts, including legislative support in Texas and potential infrastructure sales, are expected to further enhance Sempra’s financial performance and provide a favorable risk-reward scenario for investors.
According to TipRanks, Arcaro is a 5-star analyst with an average return of 12.8% and a 59.83% success rate. Arcaro covers the Utilities sector, focusing on stocks such as Ameren, Sempra Energy, and American Electric Power.
In another report released yesterday, Wells Fargo also reiterated a Buy rating on the stock with a $88.00 price target.