Stock Analysis | Sempra Outlook - Mixed Signals Amid Weak Technicals and Moderate Fundamentals

Market Snapshot

Sempra (SRE) is showing a modest price rise of 1.94%, but technical indicators suggest caution. The stock's internal diagnostic score is 4.93, which reflects a weak technical profile with more bearish signals than bullish ones.

News Highlights

• Stryker tops list of West Michigan’s largest publicly traded companies: Stryker’s revenue increased by 10.2% in fiscal 2024, while other manufacturing and consumer goods firms saw declines. This highlights sector-specific performance variations and could indirectly influence investor sentiment toward energy and infrastructure companies like Sempra.
• Independent Bank faces earnings slowdown: Reports indicate that Independent Bank is bracing for a 5% earnings dip in 2025 due to margin compression and slower loan growth. While Sempra isn't directly impacted, this trend could reflect broader economic tightening and reduce risk appetite in the market.

Analyst Views & Fundamentals

The consensus among analysts for Sempra is neutral, with a simple average rating of 3.00 and a performance-weighted rating of 3.33. These scores suggest a lack of strong bullish or bearish momentum from the analyst community, and the ratings are somewhat dispersed, with one analyst giving a "Neutral" rating within the last 20 days. The analyst from Barclays, Nicholas Campanella, has a historical winning rate of 66.7%, giving some credibility to the neutral stance.

Key Fundamental Values

• Net assets per share (growth rate): 1.31% (internal diagnostic score: 2.00)
• Net profit attributable to parent company shareholders / Net profit: 95.06% (score: 1.00)
• Inventory turnover ratio: 1.73 (score: 2.00)
• EV/EBIT: 48.23 (score: 0.00)
• Basic earnings per share (YoY growth rate): -12.13% (score: 3.00)
• Cash-UP: -0.52 (score: 2.00)
• CFOA: 0.78% (score: 0.00)
• Diluted earnings per share (YoY growth rate): -12.18% (score: 3.00)
• Inventory turnover days: 104.16 (score: 0.00)
• Current assets / Total assets: 4.17% (score: 1.00)

Alignment of Analyst Ratings and Price Trend

The current price rise (1.94%) aligns with the analysts’ neutral expectations, but the lack of strong consensus suggests the market is waiting for more decisive data before moving in either direction.

Money-Flow Trends

Big money is showing a negative trend in its flow patterns for Sempra, with all inflow ratios falling below 50%—ranging from 48.59% for large inflow ratio to 49.62% for extra-large inflow ratio. Retail (small) investors also exhibit a negative trend, with their inflow ratio at 49.40%. This suggests that both institutional and individual investors are cautious about the stock at the moment.

Key Technical Signals

Sempra's technical outlook is mixed but leans bearish. The stock has 2 bearish indicators and 0 bullish ones over the last 5 days. The internal diagnostic score for technicals is 4.93, indicating weak momentum and a need for caution.

Recent Technical Indicators

• Marubozu White (Mar 19): A neutral signal with an internal diagnostic score of 3.37, suggesting a potential consolidation phase.
• WR Overbought (Mar 22): A bearish signal with an internal diagnostic score of 3.25, indicating overbought conditions.
• WR Oversold (Mar 18, Apr 26): A bullish signal with an internal diagnostic score of 6.53, suggesting potential support from the oversold level.
• MACD Death Cross (Mar 11): A neutral signal with an internal diagnostic score of 4.5, indicating a potential weakening in the trend.
• Bullish Engulfing (Mar 29): A bullish signal with an internal diagnostic score of 6.98, suggesting a potential reversal from bearish to bullish momentum.

Momentum Summary

Technical indicators suggest the market is in a volatile state, with no clear trend direction. The bearish signals (2) outweigh the bullish ones (0), and the overall trend is weak, signaling a need for caution for traders and investors.

Conclusion

With a weak technical outlook and moderate fundamentals, Sempra is in a holding pattern. The recent bullish engulfing pattern (Mar 29) may suggest a short-term reversal, but the WR overbought signal (Mar 22) warns of caution. Investors might want to consider waiting for a pull-back or a clearer breakout before committing to larger positions. Keep an eye on the next earnings report and any new news from the energy infrastructure sector.