Southern Company price target lowered to $76 from $87 at KeyBanc

KeyBanc lowered the firm’s price target on Southern Company (SO) to $76 from $87 and keeps an Underweight rating on the shares. While the stock’s slight premium remains supported by Southern’s strong regulatory construct in its territories, particularly in GA, the firm believes the recent three-year stay-out and the absence of new rates in its largest jurisdiction will make it difficult for Southern to rebase/guide higher for its EPS growth rate. As a result, KeyBanc thinks Southern’s growth opportunities are more limited than the market is currently pricing in, and that growth rate revisions are unlikely in the near term. Consequently, it still sees Southern as an unattractive source of funds and expects its premium to compress further relative to peers.