Scotiabank reaffirmed its “Sector Outperform” on Southern Company (NYSE: SO) and increased its price target to $98 from $96, showing optimism in the utility behemoth’s growth path and financial wellness.
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Analyst Perspectives
Scotiabank analyst Andrew Weisel noted Southern Company’s strong fundamentals and strategic plans as major factors for the rise in valuation. The company’s dedication to growing its rate base and investing in infrastructure development projects places it in an advantageous position for long-term earnings growth.
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The outlook of other financial institutions on Southern Company has also been revised:
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Mizuho Securities upgraded the price target to $90 from $85, with a Neutral rating. The company noted Southern’s 2025–2029 capital investment plan worth $62.8 billion, which is anticipated to drive the rate base growth to 7%, with the possibility of growing to 8% if more opportunities surface .
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BofA Securities raised its price target to $96 from $93, while retaining a Neutral rating. The revision is based on revised earnings estimates and recognizes Southern’s steady dividend growth and robust operating history.
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Financial Performance
Southern Company’s latest financial performance shows its strength and growth prospects:
Fourth Quarter 2024: Adjusted earnings per share (EPS) were $0.50, which was modestly below expectations of analysts. Yet, revenue was $6.34 billion, higher than the consensus forecast and a 4.9% jump from a year ago .
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Full Year 2024: Operating revenues were $26.7 billion, an increase of 5.8% compared with the prior year. Adjusted EPS for the year was $4.05, evidence of solid earnings growth .
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Strategic Initiatives
Southern Company’s ambitious capital plan has the vision of upgrading its infrastructure and enabling clean energy initiatives. The plan provides substantial investment in renewable energy schemes and grid development, keeping up with the company’s drive toward sustainability and regulation compliance.
In addition, successful completion and performance of Vogtle nuclear-generating units have proven to be turning points. Those projects should pave the way toward reduced costs to operate and improved financials and further secure Southern’s hold in the energy sector.
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Market Outlook
At the last traded session, the stock of Southern Company is trading at $91.46, down slightly by 0.48% compared to the last close. The performance of the stock indicates investor faith in the company’s strategic move and financial stability.
With a solid capital investment strategy, steady dividend growth, and emphasis on sustainable energy solutions, Southern Company is poised for long-term success. Positive outlooks from analysts and higher price targets reflect the company’s ability to provide value to shareholders.