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Southern Co. (SO) Stock Drops Despite Market Gains: Important Facts to Note

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In the latest trading session, Southern Co. (SO - Free Report) closed at $88.88, marking a -0.54% move from the previous day. The stock fell short of the S&P 500, which registered a gain of 1.77% for the day. Meanwhile, the Dow experienced a rise of 1.42%, and the technology-dominated Nasdaq saw an increase of 2.28%.

Shares of the power company witnessed a gain of 1.09% over the previous month, beating the performance of the Utilities sector with its loss of 0.53% and the S&P 500's loss of 5.73%.

Analysts and investors alike will be keeping a close eye on the performance of Southern Co. in its upcoming earnings disclosure. In that report, analysts expect Southern Co. to post earnings of $1.17 per share. This would mark year-over-year growth of 13.59%. In the meantime, our current consensus estimate forecasts the revenue to be $6.93 billion, indicating a 4.3% growth compared to the corresponding quarter of the prior year.

For the full year, the Zacks Consensus Estimates project earnings of $4.31 per share and a revenue of $27.43 billion, demonstrating changes of +6.42% and +2.63%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.58% lower. Southern Co. presently features a Zacks Rank of #3 (Hold).

Digging into valuation, Southern Co. currently has a Forward P/E ratio of 20.76. This valuation marks a premium compared to its industry's average Forward P/E of 17.92.

It is also worth noting that SO currently has a PEG ratio of 3.2. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Utility - Electric Power stocks are, on average, holding a PEG ratio of 2.66 based on yesterday's closing prices.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 59, which puts it in the top 24% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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