Mizuho lifts Southern Co. stock price target to $85 from $83

Monday, Southern Co . (NYSE:SO) shares witnessed a change in their price target as Mizuho (NYSE:MFG) Securities analyst Anthony Crowdel adjusted the figure to $85.00, up from the previous target of $83.00. Despite the increase, the firm maintained a Neutral rating on the energy company’s stock. With a market capitalization of $92 billion and a current dividend yield of 3.43%, Southern Co. has maintained dividend payments for 55 consecutive years, according to InvestingPro data.

Crowdel’s decision followed Southern Co.’s subsidiary, GA Power, filing their 2025 Integrated Resource Plan (IRP) on Friday. The IRP is an extension of the company’s strategy approved by the Georgia Public Service Commission (PSC) in April 2024. The plan includes significant investments in the company’s existing energy fleet, such as extending the lifespan of gas and coal-fired plants, upgrading gas and nuclear facilities, and maintaining hydroelectric operations. Additionally, GA Power is proposing to add up to 4,000 megawatts (MW) of renewable resources by 2035, marking a 1,100MW increase from the 2023 IRP.

The approval of this IRP by the Georgia PSC is anticipated to occur in mid-2025. This filing is part of Southern Co.’s ongoing efforts to enhance its energy portfolio and infrastructure.

In a separate development, Nicor Gas, another Southern Co. subsidiary, filed a rate case in Illinois in early January. The filing aims to increase the company’s return on equity (ROE) and equity ratio from the current levels of 9.51% and 50%, respectively.

Mizuho’s reiteration of a Neutral rating on Southern Co. stock considers the company’s current trading status. The stock is trading at approximately a 15% price-to-earnings (P/E) premium compared to its peers. Crowdel believes that this premium fairly reflects the company’s value in the market. The increase in the price target to $85 is justified by current market multiples, according to the Mizuho analyst. Based on InvestingPro’s Fair Value analysis, Southern Co. appears to be trading near its Fair Value. InvestingPro subscribers have access to detailed valuation metrics and 12 additional expert insights about Southern Co., including its comprehensive Pro Research Report, which provides deep-dive analysis of the company’s financial health and growth prospects.

In other recent news, Santee Cooper, in collaboration with Centerview Partners LLC, is seeking proposals for the acquisition and completion of two partially constructed units at the V.C. Summer Nuclear Station. Southern Company, on the other hand, has issued $565 million in junior subordinated notes with a syndicate of banks including BofA Securities and J.P. Morgan Securities. Stanley W. Connally Jr. is set to become Southern Company’s new Executive Vice President and Chief Operating Officer. Southern Power, a subsidiary of Southern Company, is expanding its Millers Branch Solar Facility in Texas, increasing the facility’s capacity to 512 MW.

In the aftermath of Hurricane Helene, Gilat Satellite Networks Ltd (NASDAQ:GILT). and Hispasat partnered to provide emergency communication services in Georgia. Southern Company’s Q3 2024 earnings showed a slight increase in adjusted earnings to $1.43 per share, up from $1.42 in Q3 2023. These are just a few of the recent developments in these companies.

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