Sempra Energy (SRE) Rallies 4.47% to 2025 High on SIP Stake Sale, LNG Expansion

Shares of Sempra Energy (SRE) surged to their highest level since September 2025, with an intraday gain of 5.38% before closing up 4.47%. The rally followed the company’s announcement of strategic transactions aimed at strengthening its balance sheet and refocusing on U.S. utility operations.

The most significant move involved selling a 45% stake in Sempra Infrastructure Partners (SIP) to a KKR-led consortium for $10 billion. This transaction, set to close in late 2026, reduces SIP’s ownership to 25% for Sempra and 65% for the buyers. The deal is expected to generate $0.20 per share in annual earnings accretion by 2027 while eliminating the need for equity raises in its 2025–2029 capital plan. The proceeds will also streamline operations by deconsolidating SIP, allowing Sempra to shift 95% of its earnings to regulated utilities in Texas and California.

Parallel to the SIP sale, Sempra advanced its Port Arthur LNG Phase 2 expansion, securing $7 billion in equity financing from Blackstone, KKR, and others. The $14 billion project, with commercial operations expected by 2031, includes long-term offtake agreements with ConocoPhillips and JERA, ensuring stable revenue. Sempra retains a 50.1% stake, minimizing its capital exposure while leveraging partners for risk mitigation.

Financial guidance was revised to reflect the strategic shifts. GAAP EPS for 2025 is now projected at $3.29–$3.69, while adjusted EPS remains at $4.30–$4.70. The company reaffirmed a 7%–9% long-term EPS compound growth rate through 2029, driven by utility investments and LNG infrastructure. Credit metrics are expected to improve as non-utility risk declines, with potential rating upgrades enhancing borrowing flexibility.

Investor optimism reflects confidence in Sempra’s capital discipline and earnings visibility. The SIP stake sale and LNG project align with global demand for U.S. energy exports, positioning the company to capitalize on the energy transition while maintaining regulated utility growth. Analysts note the reduced reliance on volatile midstream assets and the accretive use of proceeds as key drivers for sustained shareholder value.