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On Monday, BofA Securities updated its outlook on Southern Co . (NYSE: SO), raising the price target from $93.00 to $96.00, while maintaining a neutral rating on the company’s stock. The utility giant, with a market capitalization of $99.13 billion, has seen its stock climb 10.72% year-to-date. Analysts at BofA Securities adjusted their earnings per share (EPS) estimates for the years 2025 through 2027 to $4.30, $4.54, and $4.88 respectively, from the previous $4.30, $4.56, and $4.88.
The slight change in the 2026 EPS estimate is attributed to a model update. These projections align with Southern Co.’s EPS guidance for 2025 of $4.20-$4.30 per share and match the consensus expectations of $4.29, $4.57, and $4.88 per share for the same timeframe.
The decision to increase the price target to $96 is based on updated price-to-earnings (P/E) multiples for the electric and gas peer group. Currently trading at a P/E ratio of 22.37x, InvestingPro analysis indicates the stock is trading above its Fair Value. BofA Securities believes that the high-quality nature of Southern Co.’s earnings stream, its strong operational track record, and favorable regulatory oversight are already factored into the current stock valuation.
Southern Co. is recognized for its consistent performance and the analysts have reiterated their neutral stance, indicating that the current stock price adequately reflects the company’s fundamental strengths and industry position. The company has demonstrated remarkable consistency in shareholder returns, having raised its dividend for 23 consecutive years, with revenue growing at 5.83% over the last twelve months.
In other recent news, Southern Company (NYSE:SO) reported its fourth-quarter 2024 earnings, which fell short of analyst expectations, with adjusted earnings per share (EPS) of $0.50, missing the estimate of $0.53. However, the company slightly exceeded revenue expectations, bringing in $6.34 billion compared to the forecasted $6.31 billion. For the full year 2024, Southern Company achieved earnings of $4.4 billion, or $4.02 per share, marking an increase from $4.0 billion, or $3.64 per share, in 2023. Additionally, the company has announced a significant capital expenditure plan of $62.8 billion for 2025 to 2029, which represents a 30% increase over the previous plan. This investment is expected to support a rate base growth of 7%, with the possibility of reaching 8% if additional opportunities are realized. In a separate development, Southern Company issued $1.8 billion in junior subordinated notes, with the proceeds likely earmarked for general corporate purposes. The company also welcomed James O. Etheredge as an independent director to its Board, bringing his extensive experience from Accenture (NYSE:ACN). Meanwhile, Mizuho (NYSE:MFG) Securities raised Southern Company’s stock price target to $90 from $85, maintaining a Neutral rating, reflecting the company’s recent strategic announcements.
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