Deutsche Bank Downgrades Sempra Energy (SRE) to Hold; Revises 2009-12 EPS Estimates

July 2, 2009 7:31 AM EDT

Deutsche Bank downgrades Sempra Energy (NYSE: SRE) from Buy to Hold. Price target $52.

Deutsche analyst says, "We continue to like SRE's utilities and natural gas infrastructure businesses that provide exposure to growing utility rate base, the REX pipeline and potential increases in LNG imports. That said, after outpacing the UTY by over 20% since the beginning of 2009, SRE currently trades at ~10.0x our 2010 EPS estimate of $5.12/share (near its diversified peer average) despite nearly 30% of its earnings being derived from its commodities trading JV. We view the risk/reward in SRE shares as balanced at current levels and are moving to a Hold rating...We could become more constructive on SRE shares again if we see: 1.) Pullback in the stock that presents adequate total return potential; 2.) Additional energy infrastructure projects that provide growth beyond 2013; 3.) Additional contracted capacity at attractive margins at LNG terminals; and/or 4.) Increased long term market heat rate assumptions in WECC...We have revised our 2009-2012 EPS estimates to $4.50, $5.12, $5.45 and $5.73, respectively."

To see more analyst ratings on SRE Click Here.

Sempra Energy is an energy services holding company. The Company, through its business units, provides electric, natural gas and other energy products and services.

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