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Investing.com - Barclays (LON:BARC) has increased its price target on Southern Co . (NYSE:SO) to $91.00 from $90.00 while maintaining an Equalweight rating on the utility company’s stock. The company, currently trading at $92.68 and sporting a market capitalization of $101.86 billion, has demonstrated strong financial health with a GOOD overall score according to InvestingPro metrics.
The price target adjustment comes as Barclays expects Southern Co. to formally incorporate $10-15 billion of incremental capital into its 2026 and beyond plan. The utility recently achieved a settlement in the Georgia Power Integrated Resource Plan (IRP), with Commission approval expected by July 15. The company has shown robust revenue growth of 9.58% over the last twelve months, while maintaining its impressive 23-year streak of dividend increases. InvestingPro subscribers can access 8 more key insights about Southern Co.’s financial performance and outlook.
Barclays notes that Southern Co. shares are increasingly reflecting reduced risk, trading at approximately 19% premium to the utility group based on 2027 estimated price-to-earnings ratio. Currently trading at a P/E ratio of 22.1x and near its 52-week high of $94.45, the stock offers a dividend yield of 3.19%. The research firm believes the capital addition should be neutral to earnings per share compound annual growth rate in 2026, with potential slight upside to consensus estimates for 2027 and beyond. For comprehensive analysis, investors can access Southern Co.’s detailed Research Report, one of 1,400+ company reports available on InvestingPro.
The firm also suggests non-core asset sales are in play to address higher financing needs, potentially involving rotation of capital across SO Power, PowerSecure and Sonat divisions. Barclays’ second-quarter earnings per share estimate falls below consensus, though it considers this largely due to outdated consensus figures.
Barclays expects the investment community will wait until the formal fourth-quarter update for Southern Co.’s long-term earnings growth rate outlook, while management is likely to reiterate its position to rebase the 5-7% compound annual growth rate from a higher starting point in 2027.
In other recent news, Southern Company has announced a leadership change, with David P. Poroch set to become the new Chief Financial Officer effective July 31, succeeding Daniel S. Tucker, who plans to retire. Tucker will transition to a senior advisory role until his retirement on October 1, 2025. Meanwhile, Jefferies has upgraded Southern Company’s stock rating from Hold to Buy, citing strong growth prospects and setting a price target of $100. The firm noted the potential for significant rate base growth, with Georgia Power expected to secure a large portion of an 8.5 gigawatt opportunity, translating to substantial capital expenditures. In other developments, Southern Company Gas subsidiaries, Virginia Natural Gas and Chattanooga Gas, have completed new renewable natural gas purchases, reducing emissions by an estimated 18,978 metric tons of CO₂e. These transactions were supported by favorable policies in Virginia and Tennessee. Additionally, Jefferies highlighted Southern Company’s clear pathway for capital deployment and growth, maintaining its price target at $100 due to the utility’s regulatory stability and projected rate base growth.
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