Sempra Outlook - Mixed Signals Amid Technical Neutrality

Market Snapshot

Takeaway: Sempra (SRE) is in a state of technical neutrality, with market direction remaining unclear and recent technical signals scarce.

The stock’s technical score of 5.22 suggests a cautious stance, as mixed signals from bullish and bearish indicators prevent a clear breakout. Investors are advised to monitor market changes and potential catalysts before committing to a position.

News Highlights

Recent news affecting Sempra and the broader market includes:

• Stryker tops list of West Michigan’s largest publicly traded companies: Stryker’s 10.2% revenue increase in 2024 highlights strong performance in the health care sector, potentially influencing broader investor sentiment in energy and infrastructure stocks like Sempra.
• SEC Form S-3ASR filed by SouthState Corporation: This filing by SouthState Corp. could signal capital-raising activity in the financial sector, indirectly impacting market liquidity and investor risk appetite, which may affect Sempra’s retail and institutional flows.
• Independent Bank Corp. announces potential slowdown: Analysts have flagged possible earnings declines for Independent Bank, reflecting broader economic caution and margin compression in the financial services sector, which could temper investor optimism about Sempra’s utility-focused business model.

Analyst Views & Fundamentals

Analyst Consensus: The average rating score is 3.00, while the performance-weighted rating score is 3.33, indicating relatively neutral market expectations. However, rating consistency is low, with current price trends showing a 0.30% decline and mismatched expectations.

Barclays analyst Nicholas Campanella, with a 66.7% historical win rate, has recently issued a Neutral rating, which aligns with the broader sentiment of caution.

Key Fundamental Factors:

• Net profit attributable to parent company shareholders / Net profit (%): 95.06%
• Inventory turnover ratio: 1.73x
• EV/EBIT: 48.23x
• ROA: 0.52%
• PE: 36.51x
• Basic earnings per share (YoY growth rate %): -12.13%
• Diluted earnings per share (YoY growth rate %): -12.18%
• Total profit (YoY growth rate %): -7.08%

Internal diagnostic scores (0-10) for these factors:

• Net profit attributable to parent company shareholders / Net profit (%): 1.00
• Inventory turnover ratio: 1.00
• EV/EBIT: 1.00
• ROA: 3.00
• PE: 1.00
• Basic earnings per share (YoY growth rate %): 3.00
• Diluted earnings per share (YoY growth rate %): 4.00
• Total profit (YoY growth rate %): 2.00

These scores highlight weak growth in earnings and profit margins, which could affect investor confidence in the short term. However, the strong net profit ratio and reasonable EV/EBIT suggest some underlying stability in Sempra’s financial health.

Money-Flow Trends

Sempra’s fund-flow score of 7.74 suggests good liquidity and investor interest across all fund sizes.

• Small-trend: Negative (Inflow ratio: 48.62%)
• Medium-trend: Negative (Inflow ratio: 48.63%)
• Large-trend: Negative (Inflow ratio: 48.71%)
• Extra-large-trend: Negative (Inflow ratio: 48.91%)

While the overall inflow ratio is 48.81%, indicating moderate interest, the negative trend across all categories suggests caution among both institutional and retail investors. Big-money flows are slightly stronger, but overall momentum remains neutral, with no strong bullish or bearish bias.

Key Technical Signals

Technical indicators for Sempra over the last five days show a mix of bearish and bullish signals:

• Bullish Engulfing: A strong bullish pattern with an internal diagnostic score of 7.59, indicating positive market sentiment.
• WR Oversold: A bullish bias indicator with a score of 6.53, suggesting a potential rebound after oversold conditions.
• WR Overbought: A neutral indicator with a score of 3.37, showing limited upside potential after recent buying.
• Marubozu White: A neutral signal with a score of 3.37, indicating a lack of conviction in the upward move.

Recent chart patterns include a Marubozu White on September 9 and a Bullish Engulfing on August 29, suggesting mixed momentum. The technical score of 5.22 reflects the balance of these signals, with the overall trend described as technical neutrality, mainly wait-and-see.

Conclusion

Sempra remains in a technical limbo, with mixed signals from both fundamentals and technical indicators. While earnings growth is weak and money flows show caution, a recent Bullish Engulfing pattern and a WR Oversold signal could hint at a potential rebound.

Actionable Takeaway: Investors are advised to consider waiting for a clearer breakout signal or a pullback in the stock price before committing to new positions. Keep an eye on earnings trends and any significant changes in the technical landscape, particularly in the next 1–2 weeks, as momentum could shift with a strong catalyst.