Back to top

Image: Bigstock

Southern Co. (SO) Stock Sinks As Market Gains: What You Should Know

Read MoreHide Full Article

Southern Co. (SO - Free Report) closed at $66.34 in the latest trading session, marking a -0.55% move from the prior day. This change lagged the S&P 500's 0.3% gain on the day. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.34%.

Coming into today, shares of the power company had gained 2.25% in the past month. In that same time, the Utilities sector lost 2.88%, while the S&P 500 lost 1.21%.

Investors will be hoping for strength from Southern Co. as it approaches its next earnings release. The company is expected to report EPS of $0.79, down 18.56% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.88 billion, up 3.44% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.62 per share and revenue of $28.44 billion, which would represent changes of +0.56% and -2.86%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Southern Co.Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.15% lower. Southern Co. is currently sporting a Zacks Rank of #4 (Sell).

Investors should also note Southern Co.'s current valuation metrics, including its Forward P/E ratio of 18.44. Its industry sports an average Forward P/E of 16.46, so we one might conclude that Southern Co. is trading at a premium comparatively.

We can also see that SO currently has a PEG ratio of 4.61. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SO's industry had an average PEG ratio of 2.79 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 96, putting it in the top 39% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Be sure to follow all of these stock-moving metrics, and many more, on

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Southern Company (The) (SO) - free report >>

Published in