Sempra (SRE): Strong earnings growth in base case mitigates uncertainty in upside opportunities beyond $10 bn of incremental

Research evidence excerpt

Equity Research

10 August 2026 | 12:02AM EDT

Sempra (SRE): Strong earnings growth in base case mitigates

uncertainty in upside opportunities beyond $10 bn of incremental

We reiterate our Buy rating on SRE following 2Q26 results, where we were

encouraged by strong earnings execution and opportunities in SRE’s base case

driving its long-term EPS guidance of 7%-9% through 2030. While there is

uncertainty around the Batch Zero process in Texas, we view the company as

insulated from this risk in the near-term as those capex opportunities present upside

to its already incremental $10bn of outlined capex at Oncor. From here, we look for

1) clarity on next steps in Texas, 2) progress on de-risking its balance sheet with the

SIP transaction and Ecogas sale expected to close this quarter, and 3) developments

on the CA legislative session and its GRC filings at SDG&E and SoCalGas. In this

update, we revise our estimates and lower our multiple at Oncor to reflect policy

uncertainty, where we now see 34% total return potential on our revised target price

of $110 (up from $109 prior).

Carly Davenport

+1(212)357-1914 |

Goldman Sachs & Co. LLC

Beatriz Abreu, CFA

+1(212)357-0455 |

Goldman Sachs & Co. LLC

Jaya Patel

Goldman Sachs & Co. LLC

Ananya Jaison

+1(332)245-7625 |

Goldman Sachs India SPL

Earnings Takeaways

Texas growth story still compelling despite Batch Zero uncertainty with strong

fundamentals supporting execution on $47.5 bn base capital plan at Oncor and

$10 bn of incremental capex. Oncor is successfully executing on its five-year base

capital plan of $47.5 billion, with $10 billion of incremental capital opportunities

through 2030. The company has progressed in firming up these incremental

opportunities, including $4 billion of North and Central Texas transmission upgrades

recently endorsed by ERCOT, $3 billion of non-Permian Basin Reliability Plan projects

endorsed in 2025, and $3 billion of investment for the System Resiliency Plan (SRP)

filing expected next year. While the timeline for the newly approved Batch Zero

process remains uncertain, we were encouraged by management’s messaging that

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