An Activist Oncor - Are We're Doing This Again?

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An Activist Oncor - Are We're Doing This Again?

May 29, 2026 Sempra

(SRE, Buy, $106 PT)UTILITIES Alex Kania

An Activist Oncor - Are We're Doing This Again? (212) 527-3572 akania@btig.com

Will Paterno WHAT YOU SHOULD KNOW: Yesterday an investor released a public letter in which it (332) 400-5158 wpaterno@btig.com

proposed that SRE spin Oncor, its Texas utility. The investor believes that a spin would

Julia MessinaEQUITY underscore the sector-leading underlying rate base growth of Oncor and free it from

(212) 588-6563 jmessina@btig.com the more complicated CA utility and Infrastructure. A combination of transmission

company takeout multiples and a rebase of the California utility valuations would Company Data

put combined value at $140 according to the letter - well over 30% upside from Closing Price $90.03

current levels. However, in our view the combined basis of the company continues to Price Target $106.00

make sense, particularly given SRE's ability to finance Oncor's leading growth with no Market Cap (M) $59,081.29RESEARCH external equity. We remain Buy on SRE shares. Enterprise Value (M) $89,239.19

■ Activist investor looking to spin Sempra's Texas utility. On Thursday 5/28 as Shares Out (M) 656.24

reported in widely circulated media an investor issued its quarterly letter to Avg Daily Vol-3 Months (M) 3.39

partners in which it disclosed a position in Sempra (confirmed by 13Fs) and Dividend / Yield $2.65 / 2.9%

highlighted the merits of a tax-free spin of Oncor. According to the letter, which

is available online, in the investor's view this spin would open up value accretion Diluted EPS (Adjusted)

potential as Oncor has one of the highest rate base growth rates in the sector. The FY Dec 2025A 2026E 2027E