Sempra Energy shares fell 3.6% in pre-market trading on Friday, extending declines toward the stock’s 52-week low of $78.97 amid investor disappointment over California’s latest wildfire policy.
The selloff followed the passage of SB 492 on August 29, 2026, which addressed wildfire mitigation measures but did not include a replenishment mechanism for the state’s wildfire fund. The legislation also left intact the existing linkage between fund solvency and liability caps for utilities, leaving financial exposure unchanged. Analysts noted that the absence of structural reform increases risk for California-based utilities, including Sempra’s subsidiaries SDG&E and SoCalGas.
Mizuho downgraded Sempra from Outperform to Neutral, cutting its price target to $84 from $104. Ladenburg Thalmann trimmed its target to $98 from $102.50 while maintaining a Buy rating. UBS reiterated a Buy rating on sector peer PG&E, which also declined sharply in pre-market trading. The broader utilities ETF (XLU) and major U.S. indices—the S&P 500, Dow Jones, and Nasdaq—traded modestly lower in pre-market activity.
The legislative outcome underscores persistent regulatory uncertainty for California utilities, where wildfire-related liabilities have historically pressured valuations and investor sentiment. Sempra’s shares now approach the lower end of their recent trading range, reflecting heightened caution among analysts and traders.
