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Southern Co
(NYSE:SO)
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Rating:62Neutral
Price Target:
$99.00
â–²(1.80% Upside)
Action:Reiterated
Date:08/04/26
The score is anchored by mixed financial performance: strong regulated profitability is tempered by high leverage and uneven free-cash-flow conversion. The earnings call meaningfully supports the outlook through reaffirmed top-end guidance and accelerating contracted load growth, but near-term technical signals remain weak and valuation is only moderately supportive given a mid-range P/E and a solid dividend yield.
Positive Factors
Regulated profitability
Southern’s above‑average regulated margins reflect stable rate‑base returns and operating scale across its utility footprint. Durable allowed returns and steady operating profitability support cash generation capacity and dividend coverage over multi‑year timeframes despite capital intensity.
Negative Factors
High and rising leverage
Elevated leverage is typical for utilities but reduces financial flexibility and raises sensitivity to higher rates and funding costs. Continued debt growth to fund generation and transmission can pressure credit metrics and increase interest expense, constraining capacity for opportunistic investments.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulated profitability
Southern’s above‑average regulated margins reflect stable rate‑base returns and operating scale across its utility footprint. Durable allowed returns and steady operating profitability support cash generation capacity and dividend coverage over multi‑year timeframes despite capital intensity.
Read all positive factors
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.
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The Fly
The FlySouthern Co (SO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$105.74B
Dividend Yield3.22%
Average Volume (3M)5.67M
Price to Earnings (P/E)22.2
Beta (1Y)-0.06
Revenue Growth6.40%
EPS Growth6.90%
CountryUS
Employees29,651
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)4.17
Shares Outstanding1,150,362,900
10 Day Avg. Volume4,077,246
30 Day Avg. Volume5,666,179
Financial Highlights & Ratios
PEG Ratio-11.12
Price to Book (P/B)2.67
Price to Sales (P/S)3.25
P/FCF Ratio-32.77
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$98.40Price Target Upside1.18% Upside
Rating ConsensusHold
Number of Analyst Covering12
EPS Forecast (FY)4.59
Revenue Forecast (FY)$30.71B
Southern Co Business Overview & Revenue Model
Company Description
The Southern Company operates as an energy utility, primarily involved in the production, transmission, and distribution of electricity. Its operations are segmented into Gas Distribution Operations, Gas Pipeline Investments, Wholesale Gas Service...
How the Company Makes Money
Southern Company makes money primarily through regulated utility operations, where state public service commissions set allowed rates designed to recover operating costs and provide an authorized return on invested capital (rate base). The largest...
Southern Co Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a strongly positive operational and financial picture: above-expectation EPS, accelerating retail and data center sales, major long-term large-load contracts (including a 3.2 GW OpenAI 25-year agreement), a deep development pipeline, proactive financing actions (reducing equity need to $1.1B by 2030), and ongoing execution on generation and transmission buildout. The primary negatives are higher interest expense and dilution, capital intensity and regulatory/timing uncertainty tied to RFPs and project certification, variable ramp rates for large loads, and local political noise around data centers. Management emphasized risk-mitigating contract structures (minimum bills and collateral) and a disciplined financing approach, which together with material growth opportunities lead to a favorable near- and long-term outlook.Positive Updates
Strong EPS Performance
Adjusted EPS of $1.13 in Q2 2026, up $0.21 versus Q2 2025 and $0.13 above the company's estimate; year-to-date adjusted EPS of $2.46; company now projects full-year 2026 adjusted EPS near or at the top of guidance range of $4.50–$4.60 and Q3 estimate of $1.50.
Negative Updates
Political and Public Perception Risks Around Data Centers
Management acknowledged 'noise' and political pushback in some areas (notably Georgia), and emphasized the need for better communication of benefits; public opposition or moratoriums in local jurisdictions could slow project approvals or deployment in select counties.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong EPS Performance
Adjusted EPS of $1.13 in Q2 2026, up $0.21 versus Q2 2025 and $0.13 above the company's estimate; year-to-date adjusted EPS of $2.46; company now projects full-year 2026 adjusted EPS near or at the top of guidance range of $4.50–$4.60 and Q3 estimate of $1.50.
Read all positive updates
Company Guidance
Management reiterated strong 2026 guidance, reporting Q2 adjusted EPS of $1.13 (up $0.21 YoY and $0.13 above estimate), H1 adjusted EPS of $2.46, a Q3 adjusted EPS outlook of $1.50, and saying full‑year 2026 adjusted EPS is expected near or at the top of the $4.50–$4.60 guidance range; operational drivers highlighted include YTD weather‑normalized retail sales +2.3% vs. H1‑2025 (the strongest June‑YTD growth in nearly 20 years), Q2 weather‑normalized commercial sales +7.4% (YTD +6%), ~11,000 residential adds in Q2 and >40,000 net electric customer adds over the last year, data‑center usage +55% in Q2 (+49% YTD) with system data‑center load now >1.2 GW (up >500 MW YoY), and this quarter’s 6 GW of newly contracted load (3 GW in Alabama plus a 3.2 GW, 25‑year OpenAI contract with 1 GW flexible demand response), bringing contracted large‑load agreements to >17 GW (with ~8 GW in late stages, including ~3 GW near‑term) and a prospective pipeline >75 GW; capital and financing metrics included regulatory approvals for ~10 GW of new company‑owned generation, two battery sites now in service with three combustion turbines/Plant Yates progressing, active RFPs for early‑2030s needs, sourcing an additional $700M of equity via ATM (forward settle through 2028) on top of roughly $2B previously settled, a reduced projected remaining equity need to $1.1B by 2030, portfolio collateral of roughly $21B backing large‑load contracts, retail base rates held stable in Georgia and Alabama until 2029, and a target of ~17% FFO‑to‑debt by 2029.Southern Co Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
45
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 30.18B | 29.55B | 26.72B | 25.25B | 29.28B | 23.11B |
| Gross Profit | 13.10B | 8.81B | 13.34B | 11.71B | 10.63B | 10.25B |
| EBITDA | 14.19B | 14.33B | 13.24B | 11.78B | 10.31B | 8.39B |
| Net Income | 4.66B | 4.34B | 4.40B | 3.98B | 3.54B | 2.41B |
Balance Sheet | ||||||
| Total Assets | 162.03B | 155.72B | 145.18B | 139.33B | 134.89B | 127.53B |
| Cash, Cash Equivalents and Short-Term Investments | 2.98B | 1.64B | 1.07B | 748.00M | 1.92B | 1.80B |
| Total Debt | 77.09B | 74.08B | 66.28B | 63.49B | 59.13B | 55.47B |
| Total Liabilities | 119.69B | 116.85B | 108.51B | 104.11B | 100.36B | 94.97B |
| Stockholders Equity | 39.57B | 36.02B | 33.21B | 31.44B | 30.41B | 28.16B |
Cash Flow | ||||||
| Free Cash Flow | 2.57B | -2.94B | 833.00M | -1.54B | -1.62B | -1.07B |
| Operating Cash Flow | 10.25B | 9.80B | 9.79B | 7.55B | 6.30B | 6.17B |
| Investing Cash Flow | -14.98B | -13.96B | -9.40B | -9.67B | -8.43B | -7.35B |
| Financing Cash Flow | 5.63B | 4.70B | -208.00M | 999.00M | 2.34B | 1.95B |
Southern Co Technical Analysis
Neutral
97.25
Price Trends
94.46
Negative
94.15
Negative
91.76
Positive
Market Momentum
-0.82
Positive
42.24
Neutral
17.84
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SO, the sentiment is Neutral. The current price of 97.25 is above the 20-day moving average (MA) of 94.41, above the 50-day MA of 94.46, and above the 200-day MA of 91.76, indicating a neutral trend. The MACD of -0.82 indicates Positive momentum. The RSI at 42.24 is Neutral, neither overbought nor oversold. The STOCH value of 17.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SO.
Southern Co Risk Analysis
Southern Co disclosed 30 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $178.85B | 19.19 | 16.82% | 2.65% | 11.83% | 55.48% | |
66 Neutral | $67.28B | 21.42 | 10.01% | 2.79% | 8.63% | -14.89% | |
66 Neutral | $96.05B | 18.54 | 9.88% | 3.26% | 6.33% | 8.98% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
63 Neutral | $46.32B | 16.50 | 9.61% | 3.45% | 6.56% | 3.72% | |
62 Neutral | $105.74B | 22.19 | 12.61% | 3.06% | 6.40% | 6.90% | |
60 Neutral | $59.90B | 23.53 | 8.89% | 3.76% | 21.98% | -0.39% |
* Utilities Sector Average
SO
Southern Co
92.52
0.73
0.80%
AEP
American Electric Power
124.65
14.94
13.62%
D
Dominion Energy
68.04
8.57
14.40%
DUK
Duke Energy
123.49
2.02
1.67%
EXC
Exelon
45.22
1.18
2.67%
NEE
NextEra Energy
85.78
15.52
22.08%
Southern Co Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Southern Co Prices Upsized Convertible Senior Notes Offering
Positive
Aug 4, 2026
On August 3, 2026, Southern Company announced that it had upsized and priced private offerings of $725 million of Series 2026A 2.125% Convertible Senior Notes due December 15, 2027, and $1.65 billion of Series 2026B 3.50% Convertible Senior Notes ...
Business Operations and StrategyPrivate Placements and Financing
Southern Company Launches Major Convertible Senior Notes Offerings
Neutral
Aug 3, 2026
On August 3, 2026, Southern Company announced private offerings of $650 million in convertible senior notes due December 15, 2027 and $1.5 billion in convertible senior notes due September 15, 2029 to qualified institutional buyers under Rule 144A...
Business Operations and StrategyPrivate Placements and Financing
Southern Co Launches New Equity Distribution Program
Neutral
Jun 8, 2026
On June 8, 2026, Southern Company entered into an equity distribution agreement with a syndicate of major investment banks, allowing it to issue and sell up to 50 million shares of common stock from time to time. The arrangement also permits the u...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Southern Co shareholders approve governance changes, reject proposals
Neutral
May 15, 2026
At its annual meeting of stockholders held on May 13, 2026, Southern Company shareholders reelected the full slate of board nominees and approved, on an advisory basis, executive compensation, as well as the ratification of Deloitte Touche as ind...
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.