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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 the most recent trading day at $69.34, moving +1.39% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.42%. Elsewhere, the Dow gained 1%, while the tech-heavy Nasdaq added 5.16%.

Heading into today, shares of the power company had gained 8.45% over the past month, outpacing the Utilities sector's gain of 2.18% and the S&P 500's gain of 0.27% 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 $0.77 per share. This would mark a year-over-year decline of 20.62%. Meanwhile, our latest consensus estimate is calling for revenue of $6.78 billion, up 2.06% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.61 per share and revenue of $28.77 billion, which would represent changes of +0.28% and -1.75%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Southern Co.These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.28% lower within the past month. Southern Co. currently has a Zacks Rank of #4 (Sell).

In terms of valuation, Southern Co. is currently trading at a Forward P/E ratio of 18.95. Its industry sports an average Forward P/E of 16.95, 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 4.74. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SO's industry had an average PEG ratio of 2.85 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 156, which puts it in the bottom 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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

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