"We are adjusting our 2005 EPS estimate to $3.29 to take into account 1Q'05 results and about $62 million in pretax performance based awards (DSM settlement) that SRE will book during the year. We are adjusting our 2006 & 2007 EPS estimates to $3.39 and $3.49, respectively, after adding $25 million (over 24 months) in PBRs and making adjustments to interest expense. Maintain $44 price target.
"After conducting further research into SRE's trading results over the last 13 quarters, we have established some parameters around the gas trading business to help us understand the volatility we are likely to experience from this business going forward. Some of these indicators and assumptions, which are mostly related to the natural gas trading book, include: Comparing natural gas prices at the end of the current quarter to the previous quarter and monitoring the unrealized revenue stream from the trading book excluding exchange related derivatives.
"Our analysis lacks precision given the nature of the business and may not be helpful during shoulder months when SRE is injecting gas into storage."
Jefferies: 1Q05 Operating EPS of $0.68 Below Expectations; Reduce Estimates
"We are maintaining our Hold rating on Sempra Energy with a price target of $41.00 (previously $42.00). Based on Friday's closing price of $39.13, our $41.00 target represents 12-month price appreciation potential of 4.8% and 12-month total return potential of 7.8%, including the company's current yield of 3.0%.
"Based on P/E valuation, we value Sempra at 40.50. Applying a 15.3 P/E multiple (equivalent to a 5% premium to our average electric utility multiple for 2005) to projected utility earnings of $1.72 per share results in $26.35. Applying a 10.0x multiple to remaining non-regulated earnings of $1.43 results in $14.30, for a total of $40.50.
Sempra's 1Q05 operating EPS was $0.68, below our estimate of $0.85 and consensus of $0.88, and versus $0.96 earned a year ago. We have excluded from 1Q05 earnings a $0.24 ($59 million) benefit from the favorable resolution of prior year federal and state income tax issues at the parent and the California utilities.
"We are reducing our 2005 EPS estimate by $0.15 to $3.05. The revision largely reflects first-quarter results and the DSM settlement. We are reducing our 2006 estimate by $0.15 to $3.15. The revision reflects the effects of the DSM settlement, lower assumed tax credits and other modest adjustments to our forecast model."
Recent SRE News
- Boyle Heights Solis S.T.E.M. Magnet High School's First All-Girls Team Competes on International Stage at the Horizon Hydrogen Grand Prix World Finals • PR Newswire (US) • 09/10/2024 10:55:00 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/09/2024 08:20:56 PM
- SoCalGas Launches New Fuel Card Program to Help Reduce Greenhouse Gas Emissions from Heavy-Duty Transportation Sector • PR Newswire (US) • 09/09/2024 08:15:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/09/2024 08:02:04 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 09/05/2024 08:34:58 PM
- Sempra Declares Common and Preferred Dividends • PR Newswire (US) • 09/05/2024 12:45:00 AM
- Form 424B5 - Prospectus [Rule 424(b)(5)] • Edgar (US Regulatory) • 09/04/2024 12:30:09 PM
- Sempra Named to FTSE4Good Index Series for Sustainable Business Practices • PR Newswire (US) • 08/15/2024 11:55:00 AM
- SoCalGas Declares Preferred Dividends • PR Newswire (US) • 08/08/2024 10:01:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/06/2024 08:20:34 PM
- Oncor Reports Second Quarter 2024 Results • PR Newswire (US) • 08/06/2024 12:05:00 PM
- Sempra Reports Second-Quarter 2024 Earnings Results • PR Newswire (US) • 08/06/2024 11:55:00 AM
- LATINO RESTAURANT ASSOCIATION OFFERS $2,500 GRANTS TO LOCAL RESTAURANT OWNERS IN SOUTH FRESNO, KINGS, AND TULARE COUNTIES • PR Newswire (US) • 08/01/2024 03:00:00 PM
- SoCalGas Scholarship Program Awards Over $300,000 to College- and Trade School-Bound Students • PR Newswire (US) • 07/24/2024 10:55:00 AM
- ONCOR TO RELEASE SECOND QUARTER 2024 RESULTS AUGUST 6 • PR Newswire (US) • 07/22/2024 09:00:00 PM
- Sempra to Report Second-Quarter 2024 Earnings August 6 • PR Newswire (US) • 07/22/2024 08:12:00 PM
- Berkshire Sells BofA Holdings, Ryanair Shares Drop 12%, Delta Still Struggling After IT Disruption • IH Market News • 07/22/2024 09:44:17 AM
- Sempra Infrastructure Announces EPC Contract with Bechtel for Port Arthur LNG Phase 2 • PR Newswire (US) • 07/18/2024 11:00:00 AM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 07/08/2024 08:19:05 PM
- SoCalGas and EVOLOH Research Project Helps Make Hydrogen and Electrolyzer Production More Affordable • PR Newswire (US) • 07/03/2024 11:45:00 AM
- Aramco and Sempra announce Heads of Agreement for equity and offtake from Port Arthur LNG Phase 2 • PR Newswire (US) • 06/26/2024 12:10:00 PM
- Sempra Foundation to Support New Mexico Communities Impacted by Wildfires • PR Newswire (US) • 06/21/2024 11:55:00 AM
- Sempra Appoints Jennifer M. Kirk to Board of Directors • PR Newswire (US) • 06/20/2024 08:15:00 PM
- SoCalGas Advances Towards Zero-Emissions Fleet with Delivery of New Ford Electric Vans • PR Newswire (US) • 06/13/2024 11:45:00 AM
- SoCalGas Volunteers to Help Sort 1.8 Million Pounds of Food to Help Labor Community Services "Stamp Out Hunger" • PR Newswire (US) • 06/07/2024 09:00:00 PM
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