Sempra Energy (SRE) Rallies 1.25% on $10B SIP Stake Sale, Hits 3-Year High

Sempra Energy (SRE) shares rose 1.25% on Monday, marking a two-day winning streak with a cumulative gain of 3.71%. The stock reached an intraday high of $155.45, its highest level since September 2025, driven by strategic developments and investor optimism over long-term growth prospects. The upward momentum follows a landmark transaction to divest a 45% stake in its Sempra Infrastructure Partners (SIP) unit for $10 billion, set to close in late 2026. This deal, which values SIP at $22.2 billion in equity, is expected to eliminate the need for equity financing in Sempra’s 2025–2029 capital plan, enhancing financial flexibility and credit metrics. Analysts noted the transaction aligns with Sempra’s focus on regulated utilities, which are projected to account for 95% of future earnings, while retaining a 25% stake in SIP alongside Abu Dhabi Investment Authority’s existing 10% holding.

Complementing the strategic partnership, Sempra Infrastructure Partners announced a $14 billion expansion of its Port Arthur LNG terminal in Texas, a project critical to U.S. energy infrastructure. The Phase 2 development includes two new liquefaction trains and an LNG storage tank, with commercial operations anticipated by 2030. The expansion secured $7 billion in equity financing led by Blackstone Credit & Insurance, with Sempra Infrastructure Partners retaining a 50.1% majority stake. This initiative underscores Sempra’s commitment to advancing LNG infrastructure amid growing global demand, supported by private equity partnerships that reduce capital intensity while maintaining operational control. The project is expected to bolster earnings accretion and reinforce Sempra’s position in the energy transition landscape.

Investor sentiment has been further buoyed by the transaction’s anticipated impact on Sempra’s credit profile, with improved FFO-to-debt ratios likely to attract favorable ratings. The sale also eliminates non-utility exposure from SIP, streamlining the company’s balance sheet and reducing leverage. With the proceeds allocated to debt reduction and capital deployment, Sempra’s ability to sustain its $2.60 annual dividend remains intact, offering stability in a volatile market. The dual focus on asset optimization and strategic growth has positioned the stock to outperform sector peers, particularly as energy infrastructure gains traction in regulatory and demand-driven narratives.