Stock Analysis | Sempra Outlook - A Mixed Bag for SRE as Technical Signals Turn Cautionary

Market Snapshot

Headline: SRE faces weak technical conditions with bearish signals dominating. Investors should remain cautious as bearish indicators outweigh the bullish, suggesting a challenging near-term outlook for Sempra (SRE).

News Highlights

Recent news items affecting Sempra include:

• SouthState Corporation filed SEC Form S-3ASR on June 10, 2025, indicating ongoing regulatory activity that could ripple through market sentiment for utilities and financial stocks alike.
• Independent Bank (IBCP) received a Zacks Rank upgrade to a "Buy" rating, highlighting the broader trend of financial services stocks drawing investor interest in a volatile market.
• Enterprise Bancorp shareholders approved board nominees in May 2025, signaling stable corporate governance and potential for long-term growth.

These developments suggest a shifting landscape for financial and utility stocks, with Sempra caught in a broader market reassessment.

Analyst Views & Fundamentals

Analysts currently present a mixed outlook on Sempra. The simple average rating is 3.00, while the performance-weighted rating is 1.65, indicating a tendency for pessimism among informed market participants. Despite a recent neutral rating from Citigroup analyst Ryan Levine, the dispersion in analyst views means investors should look closer at the fundamentals.

Key Fundamental Factors

• Basic earnings per share (YoY growth rate) is at -12.13%, an internal diagnostic score of 4.83. This indicates slowing profitability.
• Diluted earnings per share (YoY growth rate) is at -12.18%, with an internal diagnostic score of 4.66, showing consistent weakness.
• Net profit attributable to parent company shareholders / Net profit is at 95.06%, a score of 1.00, suggesting a solid allocation of profits to shareholders.
• Income tax / Total profit is at 13.74%, with an internal diagnostic score of 1.86, indicating a relatively light tax burden.
• Current assets / Total assets is at 4.17%, scoring 0.59, showing a lean capital structure.

These fundamentals suggest Sempra is maintaining profitability and capital efficiency, but earnings growth is under pressure.

Money-Flow Trends

Big-money trends are negative across the board: Large and Extra-large inflow ratios are 0.49 and 0.47, respectively, both trending in a negative direction. Meanwhile, Medium and Small flows show slightly positive and negative trends at 0.50 and 0.49, respectively. This suggests a broader caution among institutional investors.

The fund-flow score is a 7.8, categorized as "good," but the negative overall trend implies caution may be warranted as large investors remain hesitant.

Key Technical Signals

Technically, Sempra is in a weak trend with bearish dominance, as three out of seven recent indicators are bearish. The technical score is 4.78, indicating weak conditions.

Internal Diagnostic Scores for Technical Indicators

• WR Overbought: Score of 3.89, indicating a neutral rise with caution.
• RSI Overbought: Score of 3.68, a neutral bias with recent volatility.
• WR Oversold: Score of 6.35, showing a bullish bias, but this indicator appears more reliable historically.
• MACD Death Cross: Score of 3.09, a weak bearish signal.
• Bullish Engulfing: Score of 7.70, a strong bullish pattern, suggesting potential for a short-term reversal.
• Marubozu White: Score of 4.17, indicating a neutral bias with mixed returns.

Recent Chart Patterns

• August 11: WR Oversold and MACD Death Cross highlighted volatility and bearish momentum.
• August 7: Earnings Release Date occurred, but returns were mixed.
• July 31: A mix of WR Overbought, RSI Overbought, Bullish Engulfing, and Marubozu White indicated a period of conflicting signals.

These signals point to a market in a state of confusion, with no clear direction emerging despite some bullish candle patterns.

Conclusion

Investors should consider waiting for a pull-back before engaging in new positions in Sempra (SRE). While some bullish candlestick patterns suggest potential for a short-term recovery, bearish indicators like the MACD Death Cross and overbought RSI and WR levels indicate caution. Given the weak technical score and mixed analyst ratings, it may be wise to monitor earnings and broader financial market trends before committing capital.