Southern Co (SO) AI Stock Analysis

• Market Cap: $100.24B
• Dividend Yield: 3.4%
• Average Volume (3M): 6.59M
• Price to Earnings (P/E): 23.1
• Beta (1Y): -0.03
• Revenue Growth: 9.40%
• EPS Growth: -6.05%
• Country: US
• Employees: 28,314
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 0.55
• Shares Outstanding: 1,101,104,900
• 10 Day Avg. Volume: 8,556,381
• 30 Day Avg. Volume: 6,585,805
• PEG Ratio: -11.13
• Price to Book (P/B): 2.67
• Price to Sales (P/S): 3.25
• P/FCF Ratio: 9.81
• Enterprise Value/Market Cap: 1.68
• Enterprise Value/Revenue: 5.69
• Enterprise Value/Gross Profit: 7.61
• Enterprise Value/Ebitda: 12.63
• 1Y Price Target: $92.40
• Price Target Upside: -2.01% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 13
• EPS Forecast (FY): 4.55
• Revenue Forecast (FY): $29.91B

• Rating: 69 Neutral
• Price Target: $104.00 ▲(10.29% Upside)
• Action: Reiterated Date: 02/20/26
• Date: Action: Reiterated 02/20/26

The score is anchored by stable utility earnings but constrained by high leverage and historically weak/volatile free cash flow. Offsetting that, the latest earnings outlook is strong with multi-year EPS growth guidance and substantial large-load demand visibility, while technicals are constructive and the dividend supports valuation despite a relatively high P/E.

Positive Factors

Regulated Earnings Stability

Southern Company’s regulated utility businesses deliver consistent revenue and steady net margins in the low‑to‑mid teens, providing durable cash flow predictability. That regulated earnings base underpins long‑term rate‑of‑return economics and reduces operating volatility versus competitive generators.

Large‑Load Demand Pipeline

A very large, contracted data‑center and industrial pipeline (>75 GW, 10 GW signed) offers multi‑year, structural demand that supports sustained retail sales and accelerated rate‑base growth. Contract minimums and signed ramps improve revenue visibility and justify incremental generation and transmission investment.

Regulatory Approval & Project Visibility

Regulatory certification of major Georgia capacity and project‑specific cost recovery locks in multi‑billion dollar investments and includes mechanisms to allocate large‑load benefits to customers. This regulatory backing materially reduces execution/regulatory risk for a key portion of the company’s growth plan.

Negative Factors

High Leverage

Persistent leverage at roughly 1.8–2.0x equity limits financial flexibility for an asset‑heavy utility facing rising capex and interest costs. High debt increases refinancing and credit risk, constrains the ability to fund overruns without dilution, and makes the firm more sensitive to regulatory or demand setbacks.

Weak/Volatile Free Cash Flow

F F C F has been inconsistent and negative in several years, reflecting heavy capex and timing of rate recovery. Volatile free cash flow reduces internal funding for growth, increases reliance on external financing, and raises execution risk if project cash inflows or regulatory timing slips.

Execution, Timing & Financing Risk

An $81B five‑year capex increase requires substantial project execution and regulatory approvals; timing variability in customer ramping plus planned equity programs (ATM, mandatory convertible) create dilution and funding execution risk that could pressure credit metrics and constrain capital returns if outcomes diverge.

Southern Co Business Overview & Revenue Model

Company Description

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. It operates through Gas Distribution Operations, Gas Pipeline Investments, Wholesale Gas Services, and Gas Marketing Services segments. The company also develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, and Tennessee, as well as provides gas marketing services, wholesale gas services, and gas pipeline investments operations. In addition, it owns and/or operates 30 hydroelectric generating stations, 24 fossil fuel generating stations, three nuclear generating stations, 13 combined cycle/cogeneration stations, 45 solar facilities, 15 wind facilities, one fuel cell facility, and four battery storage facility; and constructs, operates, and maintains 76,289 miles of natural gas pipelines and 14 storage facilities with total capacity of 157 Bcf to provide natural gas to residential, commercial, and industrial customers. The company serves approximately 8.7 million electric and gas utility customers. Further, the company offers digital wireless communications and fiber optics services. The Southern Company was incorporated in 1945 and is headquartered in Atlanta, Georgia.

How the Company Makes Money

Southern Company generates revenue primarily through the sale of electricity and natural gas to its customer base, which includes residential, commercial, and industrial users. Key revenue streams include regulated electricity sales, where rates are set by state utility commissions, ensuring a stable income source. Additionally, the company earns revenue from natural gas distribution services and from its investments in renewable energy projects, which contribute to its long-term growth strategy. Southern Company has established partnerships with various stakeholders, including governmental entities and other energy firms, to expand its renewable energy portfolio and enhance its infrastructure, thus contributing to its overall earnings. The company's diverse energy generation mix, which includes coal, natural gas, nuclear, and renewable sources, allows it to adapt to changing market conditions and regulatory environments, further solidifying its revenue base.

Southern Co Financial Statement Overview

Summary

Earnings and margins are relatively steady for a regulated utility, but the balance sheet is heavily leveraged (debt ~1.8x–2.0x equity) and free cash flow has been weak/volatile with multiple negative years, increasing reliance on external funding.

Income Statement

Revenue has generally trended upward over the period (with a dip in 2023), supported by solid profitability for a regulated utility. Net profit margins are steady in the low-to-mid teens (about 10%–16%), and net income improved versus earlier years, indicating resilient earnings power. The main weakness is uneven growth (notably the 2023 contraction) and some year-to-year volatility in operating profitability indicators, which tempers the score despite overall stability.

Balance Sheet

The balance sheet reflects a leveraged utility profile: debt is high and persistent, with debt running at roughly ~1.8x–2.0x equity across the years. Equity has grown, and returns on equity are fairly consistent around the low-teens, which is a positive sign of steady regulated returns. However, leverage remains the key constraint and leaves less flexibility if rates, capital spending needs, or regulatory outcomes turn unfavorable.

Cash Flow

Operating cash flow is consistently positive, but free cash flow has been weak and volatile—negative in multiple years and very low in 2024—suggesting heavy investment/capital spending demands typical of the sector. Cash generation relative to accounting earnings is inconsistent (including periods where free cash flow does not cover net income), increasing reliance on external funding. The 2025 free-cash-flow figure improves materially, but the sharp swing versus prior years lowers confidence in durability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	29.55B	26.72B	25.25B	29.28B	23.11B
Gross Profit	8.81B	13.34B	11.71B	10.63B	10.25B
EBITDA	13.30B	13.24B	11.78B	10.31B	8.39B
Net Income	4.34B	4.40B	3.98B	3.54B	2.41B
Balance Sheet
Total Assets	155.72B	145.18B	139.33B	134.89B	127.53B
Cash, Cash Equivalents and Short-Term Investments	1.64B	1.07B	748.00M	1.92B	1.80B
Total Debt	65.82B	66.28B	63.49B	59.13B	55.47B
Total Liabilities	116.85B	108.51B	104.11B	100.36B	94.97B
Stockholders Equity	36.02B	33.21B	31.44B	30.41B	28.16B
Cash Flow
Free Cash Flow	-3.59B	833.00M	-1.54B	-1.62B	-1.07B
Operating Cash Flow	9.80B	9.79B	7.55B	6.30B	6.17B
Investing Cash Flow	-13.96B	-9.40B	-9.67B	-8.43B	-7.35B
Financing Cash Flow	4.70B	-208.00M	999.00M	2.34B	1.95B

Southern Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SO, the sentiment is Positive. The current price of 94.3 is above the 20-day moving average (MA) of 90.04, above the 50-day MA of 87.74, and above the 200-day MA of 89.78, indicating a bullish trend. The MACD of 1.61 indicates Negative momentum. The RSI at 64.13 is Neutral, neither overbought nor oversold. The STOCH value of 65.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SO.

Southern Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AEP	80 Outperform	$68.84B	19.11	12.33%	3.25%	7.66%	37.42%
DUK	71 Outperform	$97.39B	19.81	9.74%	3.61%	4.80%	14.44%
NEE	70 Outperform	$190.06B	27.63	13.05%	2.84%	26.96%	-6.80%
SO	69 Neutral	$100.24B	23.13	12.54%	3.40%	9.40%	-6.05%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
D	65 Neutral	$55.27B	22.02	9.27%	4.59%	12.72%	4.90%
EXC	65 Neutral	$48.32B	17.27	9.94%	3.68%	6.07%	15.20%

Southern Co Corporate Events

Southern Co Wins Approval for Major Georgia Power Expansion

On December 19, 2025, the Georgia Public Service Commission approved a settlement between Georgia Power and the commission’s advocacy staff that certifies 9,885 megawatts of new capacity from the company’s 2029-2031 all-source request for proposals and supplemental resources plan, locking in project-specific costs and requiring construction monitoring by regulators. The package includes company-owned projects representing about $16.3 billion in capital investment, roughly $14 billion of which is expected between 2026 and 2029, and commits Georgia Power to structure its next base rate case so that incremental revenue from large-load customers produces at least $556 million per year in levelized customer benefits—equivalent to about $8.50 a month in bill relief for a typical residential customer—over 2029 to 2031.

The most recent analyst rating on (SO) stock is a Hold with a $94.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.

Southern Co Reaches Settlement with Georgia PSC

On December 9, 2025, Georgia Power Company reached a settlement agreement with the Georgia Public Service Commission’s Public Interest Advocacy Staff to resolve its application for the certification of capacity from the 2029-2031 All-Source Request for Proposals. The agreement, pending approval by the Georgia PSC, would certify 9,885 megawatts of resources at their respective costs, including $16.3 billion in company-owned projects. The settlement aims to apply downward pressure on customer rates, potentially saving typical residential customers $102 annually from 2029 to 2031. The Georgia PSC is set to vote on the agreement on December 19, 2025, but the outcome remains uncertain.

The most recent analyst rating on (SO) stock is a Hold with a $92.00 price target. To see the full list of analyst forecasts on Southern Co stock, see the SO Stock Forecast page.