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Southern Co. (SO) Gains But Lags Market: What You Should Know

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Southern Co. (SO - Free Report) closed at $69.83 in the latest trading session, marking a +0.79% move from the prior day. This move lagged the S&P 500's daily gain of 3.06%. At the same time, the Dow added 2.68%, and the tech-heavy Nasdaq gained 0.05%.

Prior to today's trading, shares of the power company had lost 7.98% over the past month. This has lagged the Utilities sector's loss of 6.61% and the S&P 500's loss of 4.31% in that time.

Investors will be hoping for strength from Southern Co. as it approaches its next earnings release. In that report, analysts expect Southern Co. to post earnings of $0.86 per share. This would mark year-over-year growth of 2.38%. Meanwhile, our latest consensus estimate is calling for revenue of $5.62 billion, up 8.09% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.56 per share and revenue of $24.81 billion. These totals would mark changes of +4.4% and +7.33%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Southern Co.These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. Southern Co. currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Southern Co. is currently trading at a Forward P/E ratio of 19.45. This valuation marks a premium compared to its industry's average Forward P/E of 18.31.

Meanwhile, SO's PEG ratio is currently 4.86. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Utility - Electric Power industry currently had an average PEG ratio of 3.12 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 159, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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