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Investing.com - Jefferies has raised its price target on Southern Co. (NYSE:SO) to $114.00 from $108.00 while maintaining a Buy rating on the utility company’s stock. The stock, currently trading at $96.13, is near its 52-week high of $96.79, though InvestingPro analysis suggests the shares may be slightly overvalued at current levels.
The investment firm cited Southern Co .’s $80.7 billion capital expenditure plan for 2025-2029, which is expected to drive an 8.5% compound annual growth rate (CAGR) in the company’s rate base and an 8.1% earnings per share CAGR to $5.80 by 2029. With a market capitalization of $105.75 billion and a consistent 23-year track record of dividend increases, Southern Co. has demonstrated strong shareholder returns, currently offering a 3.08% dividend yield.
Jefferies also noted that Southern Co.’s funds from operations to debt ratio is projected to rise above 16% by 2029, strengthening the company’s financial position.
For the third quarter of 2025, Jefferies previews earnings of $1.53 per share compared to the company’s guidance of approximately $1.50 per share, though it cautions investors not to expect any earnings-related messaging.
The investment firm highlighted Southern Co.’s contracting, certification, and financing discipline as distinguishing factors, adding that the year-end Georgia Public Service Commission order anchors execution for 2026-2031 and reinforces affordability.
In other recent news, Southern Company has been the focus of several key developments. Moody’s Ratings has changed Southern Company’s outlook to negative from stable, while maintaining Georgia Power Company’s outlook at stable. This comes as Southern Company’s Baa1 senior unsecured rating and Prime-2 commercial paper rating were affirmed. Meanwhile, Georgia Power, a subsidiary of Southern Company, has filed contracts for nearly 2 gigawatts of new customer demand under newly approved rules by the Georgia Public Service Commission. These contracts aim to serve large-load customers without imposing additional costs on residential and small business customers.
In terms of analyst ratings, Scotiabank downgraded Southern Company from Sector Outperform to Sector Perform, citing valuation concerns as the stock trades at a 13% price-to-earnings premium compared to their coverage median. Conversely, Evercore ISI initiated coverage on Southern Company with an In Line rating, highlighting growth potential due to favorable regulatory outcomes in Georgia. Additionally, Southern Telecom, another subsidiary of Southern Company, has formed a strategic alliance with Seimitsu to create SouthernWaves, a fiber-optic network service in the Southeast. This partnership will expand Southern Telecom’s offerings by combining its fiber infrastructure with Seimitsu’s network management capabilities.
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