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

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In the latest close session, Southern Co. (SO - Free Report) was down 1.04% at $90.83. The stock's change was less than the S&P 500's daily gain of 0.21%. At the same time, the Dow added 0.25%, and the tech-heavy Nasdaq gained 0.45%.

The stock of power company has fallen by 3.07% in the past month, lagging the Utilities sector's loss of 1.2% and the S&P 500's gain of 3.07%.

Investors will be eagerly watching for the performance of Southern Co. in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $1.46, reflecting a 2.1% increase from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $7.34 billion, showing a 0.96% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $4.28 per share and a revenue of $28.37 billion, demonstrating changes of +5.68% and +6.17%, respectively, from the preceding year.

Any recent changes to analyst estimates for Southern Co. should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 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).

With respect to valuation, Southern Co. is currently being traded at a Forward P/E ratio of 21.47. This represents a premium compared to its industry average Forward P/E of 17.68.

One should further note that SO currently holds a PEG ratio of 3.17. 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. Utility - Electric Power stocks are, on average, holding a PEG ratio of 2.72 based on yesterday's closing prices.

The Utility - Electric Power industry is part of the Utilities sector. This industry, currently bearing a Zacks Industry Rank of 68, finds itself in the top 28% echelons of all 250+ industries.

The Zacks Industry Rank is ordered 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.

To follow SO in the coming trading sessions, be sure to utilize Zacks.com.


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