Is Sempra overvalued or undervalued?

As of 17 October 2025, the valuation grade for Sempra has moved from very expensive to expensive, indicating a shift in perception regarding its valuation. Based on the current metrics, Sempra appears to be overvalued. The P/E ratio stands at 15, while its peers, such as Duke Energy Corp. and American Electric Power Co., Inc., have P/E ratios of 18.96 and 16.05, respectively. Additionally, Sempra's EV to EBITDA ratio is 15.83, which is higher than the industry average, suggesting that the company may not be priced favorably compared to its competitors.
In terms of returns, Sempra has underperformed relative to the S&P 500 over multiple periods, with a year-to-date return of 4.07% compared to the S&P 500's 13.30%. This trend continues over longer periods, with a 3-year return of -36.98% versus the S&P 500's 81.19%. Overall, these valuation ratios and return comparisons reinforce the conclusion that Sempra is overvalued in the current market environment.