DCF Studio

    SRE · NYQ · Utilities

    Sempra

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD -36.33

    Market price

    USD 85.97

    Implied upside

    -142.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 56.8% of revenue against depreciation of 16.1%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD -36.33-142.3%
    Exit multiple
    USD 6.59-92.3%
    Market price
    USD 85.97

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -3bn-1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 13.7bnUSD 13.6bnUSD 13.6bnUSD 13.6bnUSD 13.7bnUSD 13.8bnUSD 14.0bnUSD 14.3bnUSD 14.6bnUSD 14.9bn+1.0%
    EBITUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 3.0bnUSD 3.0bnUSD 3.1bnUSD 3.2bn+1.0%
    NOPATUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.4bnUSD 2.4bnUSD 2.5bn+1.0%
    Add depreciation & amortisationUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.4bn+1.0%
    Less capital expenditureUSD -7.8bnUSD -7.2bnUSD -6.7bnUSD -6.2bnUSD -5.7bnUSD -5.2bnUSD -4.7bnUSD -4.3bnUSD -3.8bnUSD -3.3bn-9.0%
    Capex, % of revenue56.8%52.9%49.1%45.3%41.4%37.6%33.7%29.9%26.1%22.2%-
    Less increase in working capitalUSD -121.1kUSD 3.6mUSD 1.2mUSD -1.1mUSD -3.4mUSD -5.8mUSD -8.2mUSD -10.7mUSD -13.3mUSD -16.1m+72.2%
    Free cashflow to firmUSD -3.3bnUSD -2.7bnUSD -2.2bnUSD -1.7bnUSD -1.2bnUSD -654.2mUSD -127.2mUSD 415.7mUSD 981.1mUSD 1.6bn-
    Discount factor0.96730.90510.84680.79230.74140.69370.64900.60730.56820.5317-
    Present valueUSD -3.2bnUSD -2.5bnUSD -1.9bnUSD -1.3bnUSD -868.6mUSD -453.8mUSD -82.5mUSD 252.4mUSD 557.5mUSD 838.0m-
    Present Value Of The ForecastUSD -8.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.698Reported 0.549, pulled toward 1.0 (Blume)
    Cost of equity7.85%Risk-free + beta x equity risk premium
    Cost of debt6.73%Risk-free + 184bp, the spread for a BB rating at 2.0x interest cover. Book interest / average debt was lower, at 4.3%.
    Market capitalisationUSD 56.2bn61.6% of capital
    Total debtUSD 35.0bn38.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.88%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD -36.33

    176% of EV

    Forecast FCFF, final year
    USD 1.6bn
    Capex at depreciation, working capital in reinvestment
    USD 2.5bn
    Less reinvestment at g/ROIC (36.4% of NOPAT)
    USD -909.6m
    Capitalised
    USD 1.6bn
    ROIC (WACC floor)
    6.9%
    Terminal value, undiscounted
    USD 37.3bn
    Terminal value, discounted
    USD 19.8bn
    Enterprise value
    USD 11.2bn
    Less net debt
    USD 35.0bn
    Equity value
    USD -23.8bn

    Exit at 16.2x EBITDA

    Value per shareUSD 6.59

    122% of EV

    Terminal value, undiscounted
    USD 90.1bn
    Terminal value, discounted
    USD 47.9bn
    Enterprise value
    USD 39.3bn
    Less net debt
    USD 35.0bn
    Equity value
    USD 4.3bn

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.88%-15.43-16.54-17.64-18.75-19.85
    5.88%-26.99-27.86-28.72-29.59-30.45
    6.88%-34.94-35.63-36.33-37.03-37.73
    7.88%-40.66-41.24-41.82-42.40-42.97
    8.88%-44.93-45.42-45.90-46.39-46.87

    Outlined: this model. Green text: above today's price of 85.97. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-1.7%0.9%19.4%
    EBIT margin22.5%21.2%71.0%
    Discount rate-6.9%3.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.