Wall Street keeps cutting Sempra while Petrobras commits for 20 years
Barclays lowered its Sempra target to $90 from $103, the third cut in under a month, weeks after Petrobras signed a 20-year deal for Port Arthur Phase 2 capacity. The argument is over what US gas costs in 2030, when those trains start.
Vincent Jiang · 2 min read
The third cut in under a month
Barclays took its Sempra price target to $90 from $103 on October 12, the third reduction since mid-September 1. Morgan Stanley−0.11% — Morgan Stanley, down 0.11 percent today moved to $100 from $104 on September 18, Ladenburg Thalmann to $89.50 from $98 on September 22, and Scotiabank started coverage on September 29 at $83, the low mark among them 1. The shares closed at $81.34 on October 9, down 7.87% since January 1, against an average analyst target of $99.75 1.
Every Sempra price-target move since September 18 has been downward
- Previous target
- Revised target
Data
| Previous target | Revised target | Change | |
|---|---|---|---|
| Morgan Stanley, 18 Sep | $104.0 | $100.0 | -3.8% |
| Ladenburg Thalmann, 22 Sep | $98.0 | $89.5 | -8.7% |
| Barclays, 12 Oct | $103.0 | $90.0 | -12.6% |
Barclays sits between Scotiabank's $83 low and Morgan Stanley's $100 high
Data
| Current target | |
|---|---|
| Scotiabank, 29 Sep | $83 |
| Ladenburg Thalmann, 22 Sep | $89.5 |
| Barclays, 12 Oct | $90 |
| Morgan Stanley, 18 Sep | $100 |
A 20-year buyer arrived days before the cuts
The retreat began four days after news that points the other way. On September 14, Sempra Infrastructure signed a 20-year sales and purchase agreement with Petrobras for roughly 800,000 tonnes of LNG a year from Port Arthur Phase 2 in Jefferson County, Texas, the first South American buyer in its portfolio 2. Phase 2 took final investment decision in September 2025 and adds two trains of about 13 Mtpa, due online in 2030 and 2031; commissioning at Phase 1 is advancing toward a start at or near the end of 2027 23.
The contract covers 6% of the plant
Petrobras accounts for about 6.2% of Phase 2 capacity, and the pricing formula was not disclosed 4. The build was pegged near $12 billion, plus $2 billion of shared facilities 4. Fulcrum LNG chief executive Jesus Bronchalo named the risk on October 6: "Henry Hub is going to get to the point where it becomes too expensive or you are not going to be too competitive" 5. Sempra Infrastructure's own general counsel, Julie Mayo, said expansion is now funded with private equity funds rather than external loans 5. Sempra is selling a 45% stake in Sempra Infrastructure Partners to KKR affiliates and keeping 25%, inside a $65 billion five-year plan that directs more than 95% of spending to regulated utilities 6.
Today's gas market says otherwise
Henry Hub averaged $2.93 per million Btu from June through August, about 6% below a year earlier, while European and Asian LNG benchmarks sat near $25.40 in September 7. The warning prices 2030 gas, not this winter's.
November 4 is the tell
Second-quarter adjusted EPS rose to $1.16 from $0.89, and full-year guidance of $4.80 to $5.30 held 8. The next reading lands on November 4 8. Either the contract book is the number, or the feedstock bill is.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
