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

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Southern Co. (SO - Free Report) closed the most recent trading day at $45.49, moving -0.85% from the previous trading session. This move lagged the S&P 500's daily gain of 0.48%. At the same time, the Dow added 0.53%, and the tech-heavy Nasdaq gained 0.8%.

Coming into today, shares of the power company had lost 3.53% in the past month. In that same time, the Utilities sector lost 2.82%, while the S&P 500 lost 2.09%.

SO will be looking to display strength as it nears its next earnings release, which is expected to be February 20, 2019. In that report, analysts expect SO to post earnings of $0.22 per share. This would mark a year-over-year decline of 56.86%. Meanwhile, our latest consensus estimate is calling for revenue of $5.35 billion, down 4.88% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for SO. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. SO is currently a Zacks Rank #4 (Sell).

Investors should also note SO's current valuation metrics, including its Forward P/E ratio of 15.24. This valuation marks a discount compared to its industry's average Forward P/E of 17.9.

We can also see that SO currently has a PEG ratio of 3.39. 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. The Utility - Electric Power was holding an average PEG ratio of 3.18 at yesterday's closing price.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 165, putting it in the bottom 36% 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.

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