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 the most recent trading day at $56.49, moving -0.74% from the previous trading session. This move lagged the S&P 500's daily gain of 0.23%. Meanwhile, the Dow gained 0.85%, and the Nasdaq, a tech-heavy index, lost 0.08%.

Heading into today, shares of the power company had gained 3.19% over the past month, lagging the Utilities sector's gain of 7.18% and the S&P 500's gain of 3.84% in that time.

Investors will be hoping for strength from SO as it approaches its next earnings release, which is expected to be July 31, 2019. The company is expected to report EPS of $0.71, down 11.25% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.04 billion, down 10.34% from the year-ago period.

SO's full-year Zacks Consensus Estimates are calling for earnings of $3.03 per share and revenue of $22.35 billion. These results would represent year-over-year changes of -1.3% and -4.86%, respectively.

Investors might also notice recent changes to analyst estimates for SO. Recent revisions tend to reflect the latest 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection remained stagnant. SO is currently a Zacks Rank #2 (Buy).

Looking at its valuation, SO is holding a Forward P/E ratio of 18.77. Its industry sports an average Forward P/E of 20.38, so we one might conclude that SO is trading at a discount comparatively.

Meanwhile, SO's PEG ratio is currently 4.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Utility - Electric Power was holding an average PEG ratio of 3.87 at yesterday's closing price.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 82, putting it in the top 33% 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.

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


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