Sempra Cuts 2021 Guidance, Expects $1.1B Charge in Q3

Sempra Energy (SRE) has slashed its guidance for full-year 2021 due to a one-time charge expected in the third quarter of 2021. The energy service company engages in the sale, distribution, storage and transportation of electricity and natural gas.

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The company expects earnings per share in the range of $3.83 to $4.43 in 2021, down from the prior range of $7.41 to $8.01. Also, it anticipates adjusted EPS to be at the upper end of $7.75 to $8.35. Meanwhile, it has maintained its full-year 2022 EPS guidance range of $8.10 to $8.70. (See Sempra stock charts on TipRanks)

Sempra’s subsidiary The Southern California Gas Company has agreed to take a $1.1 billion settlement charge related to the 2015 Aliso Canyon natural gas storage facility leak.

The company also announced that it has completed all closing conditions required for the sale of the non-controlling 20% interest in Sempra Infrastructure to KKR, which is expected to be on October 1.

The Chairman and CEO of Sempra, Jeffrey W. Martin, said, “At this point in the year, we are pleased with our progress on several key strategic initiatives, including the timing of closing for Sempra Infrastructure, ongoing efforts to reduce litigation risk and improved visibility to the company’s financial outlook.”

On September 17, Morgan Stanley analyst Stephen Byrd maintained a Hold rating on the stock but lowered the price target to $155 from $156. The new price target implies 20.3% upside potential from current levels.

Based on 5 Buys and 3 Holds, the stock has a Moderate Buy consensus rating. The average Sempra price target of $159.13 implies 23.5% upside potential from current levels.

TipRanks data shows that financial blogger opinions are 100% Bullish on SRE, compared to the sector average of 74%.