Southern Co (SO)
NYSE:SO
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Southern Co
(NYSE:SO)
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Rating:66Neutral
Price Target:
$104.00
â–²(7.28% Upside)
Action:ReiteratedDate:03/20/26
The score is driven by stable utility earnings but constrained by leverage and historically weak/volatile free cash flow. Offsetting these risks are constructive technical momentum and a notably strong earnings-call outlook with raised multi-year growth expectations, while valuation and yield are supportive but not clearly inexpensive.
Positive Factors
Regulated rate-base growth & capital plan
A large, regulator‑backed capital program that targets ~9% annual rate‑base growth materially expands the utility earning asset base. Over multi years this supports predictable regulated revenue and earnings growth as investments are included in rates, underpinning the company’s multi‑year EPS guidance.
Negative Factors
High leverage
Persistently high leverage reduces financial flexibility and elevates funding and interest‑rate sensitivity. For a capex‑intensive utility, elevated debt ratios constrain credit metrics, limit cushion for rate or execution setbacks, and increase reliance on consistent access to capital markets over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated rate-base growth & capital plan
A large, regulator‑backed capital program that targets ~9% annual rate‑base growth materially expands the utility earning asset base. Over multi years this supports predictable regulated revenue and earnings growth as investments are included in rates, underpinning the company’s multi‑year EPS guidance.
Read all positive factors
Southern Co (SO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$108.51B
Dividend Yield3.4%
Average Volume (3M)5.75M
Price to Earnings (P/E)22.2
Beta (1Y)>-0.01
Revenue Growth9.40%
EPS Growth-6.05%
CountryUS
Employees28,314
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)0.55
Shares Outstanding1,119,391,200
10 Day Avg. Volume5,454,031
30 Day Avg. Volume5,745,688
Financial Highlights & Ratios
PEG Ratio-11.13
Price to Book (P/B)2.67
Price to Sales (P/S)3.25
P/FCF Ratio-26.79
Enterprise Value/Market Cap1.59
Enterprise Value/Revenue5.84
Enterprise Value/Gross Profit13.44
Enterprise Value/Ebitda12.17
Forecast
1Y Price Target
$101.50Price Target Upside4.70% Upside
Rating ConsensusHold
Number of Analyst Covering14
EPS Forecast (FY)4.56
Revenue Forecast (FY)$30.73B
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...
How the Company Makes Money
Southern Company makes money primarily through regulated utility revenues and, to a lesser extent, through sales from non-utility/wholesale generation and other energy-related services. (1) Regulated electric utilities: The largest share of earnin...
Southern Co Key Performance Indicators (KPIs)
Any
Kilowatt-Hour Sales by Segment
Monitors electricity sales across different customer segments, highlighting demand trends and potential growth areas within residential, commercial, or industrial markets.
Monitors electricity sales across different customer segments, highlighting demand trends and potential growth areas within residential, commercial, or industrial markets.
Data provided by:
The Fly
The FlySouthern Co Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operational and financial outlook: EPS beat and growth, robust retail and commercial (data center) demand, a very large signed and prospective large-load pipeline, upgraded sales and earnings guidance, and proactive financing to support a materially expanded $81B five-year capital plan. Risks were acknowledged — higher O&M, depreciation and interest costs, substantial near-term capex increases requiring continued financing and regulatory approvals, timing variability in customer load ramps, and policy/regulatory noise around data centers — but management articulated mitigations (contract minimums, collateral, rate-stabilization agreements, proactive equity issuance, secure supply arrangements) and expressed confidence in execution. Overall, highlights and forward-looking upside materially outweigh the discussed challenges.Positive Updates
Strong Adjusted EPS Performance
Adjusted earnings per share of $4.30 for 2025 (top of guidance), representing 6% growth year-over-year and 9% average annual growth since 2023; 11th consecutive year at or above guidance.
Negative Updates
Rising Operating and Financing Costs
Performance was partially offset by higher operations & maintenance expenses, increased depreciation & amortization and rising interest costs, which could pressure near-term margins and cash flow.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Adjusted EPS Performance
Adjusted earnings per share of $4.30 for 2025 (top of guidance), representing 6% growth year-over-year and 9% average annual growth since 2023; 11th consecutive year at or above guidance.
Read all positive updates
Company Guidance
Southern Company provided multi‑year guidance and detailed metrics: 2026 adjusted EPS guidance of $4.50–$4.60 (Q1 estimate $1.20), versus $4.30 adjusted EPS in 2025 (top of guidance), implying roughly 7% year‑over‑year growth; management expects 8%–9% adjusted EPS CAGR from 2026–2028 with 2027 guidance $4.85–$4.95 (~8% up) and 2028 $5.25–$5.45 (~9% up), about 7%–8% annual growth thereafter and an average 8% annual EPS growth from the 2026 midpoint to 2030. Electricity volumes are expected to accelerate (≥3% retail sales growth in 2026; ~10% average annual retail sales growth 2026–2030; Georgia Power ~13% over that period), supported by a >75 GW large‑load pipeline with 26 signed contracts totaling 10 GW (up 2 GW QoQ, 4 GW YoY), 8 GW of five‑year ramps and 10 GW beyond 2030, plus ~10 GW in late‑stage discussions (3 GW highly likely). The $81 billion five‑year base capital plan (95% regulated) is up ~$18 billion (~30%) year‑over‑year with ~$42 billion expected through 2030 and ~9% average annual regulated rate base growth; Southern Power has ~1,000 MW remarketing opportunity by 2030 and is evaluating up‑rates up to ~700 MW. Financing and credit targets include addressing ~$9 billion of 2025 equity needs (including $4B ATM with forwards and $2B mandatory convertible), nearly all settled by 2028, an incremental ~$2B equity need to 2030, a target FFO/debt of ~15% through 2027 improving toward ~17% by 2029, planned dividend modest increases with payout falling to the low‑ to mid‑60% range, and upside potential from capacity repricing observed at roughly 2–3x (market examples near $20–$25/kW‑month).Southern Co Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
55
Neutral
Cash Flow
46
Neutral
| 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 | 14.33B | 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
Positive
96.94
Price Trends
93.70
Positive
90.46
Positive
91.18
Positive
Market Momentum
0.60
Positive
59.47
Neutral
84.21
Negative
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 96.94 is above the 20-day moving average (MA) of 96.39, above the 50-day MA of 93.70, and above the 200-day MA of 91.18, indicating a bullish trend. The MACD of 0.60 indicates Positive momentum. The RSI at 59.47 is Neutral, neither overbought nor oversold. The STOCH value of 84.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SO.
Southern Co Risk Analysis
Southern Co disclosed 29 risk factors in its most recent earnings report. Southern Co reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Southern Co Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $71.59B | 16.71 | 12.06% | 3.25% | 7.66% | 37.42% | |
71 Outperform | $102.19B | 18.33 | 9.69% | 3.61% | 4.80% | 14.44% | |
67 Neutral | $193.20B | 24.54 | 13.05% | 2.84% | 26.96% | -6.80% | |
66 Neutral | $108.51B | 22.16 | 12.50% | 3.40% | 9.40% | -6.05% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $50.06B | 15.92 | 9.87% | 3.68% | 6.07% | 15.20% | |
63 Neutral | $54.68B | 16.69 | 10.77% | 4.59% | 12.72% | 4.90% |
* Utilities Sector Average
SO
Southern Co
96.94
12.49
14.79%
AEP
American Electric Power
132.36
34.07
34.66%
D
Dominion Energy
62.22
13.64
28.07%
DUK
Duke Energy
131.41
18.55
16.43%
EXC
Exelon
48.94
5.79
13.41%
NEE
NextEra Energy
92.73
29.55
46.77%
Southern Co Corporate Events
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Southern Co Issues $1.3 Billion Subordinated Notes
Positive
Mar 19, 2026
On March 16, 2026, The Southern Company entered into an underwriting agreement with a syndicate of major investment banks to issue and sell $1.3 billion of its Series 2026A 6.00% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due April 1, 205...
Business Operations and StrategyPrivate Placements and Financing
Southern Subsidiaries Secure DOE-Backed Credit Facilities
Positive
Feb 25, 2026
On February 20, 2026, Alabama Power and Georgia Power, both Southern Co. subsidiaries, executed separate loan guarantee agreements with the U.S. Department of Energy under the Title XVII loan guarantee program. On the same date, each utility also ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.