Atlanta, Georgia-based The Southern Company (SO) engages in the generation, transmission, and distribution of electricity. With a market cap of $90.4 billion, Southern operates as one of the largest utility companies in the U.S. and serves over 9 million customers in Mississippi, Alabama, Georgia, Tennessee, Virginia, and other states.
The utility giant is set to unveil its fourth-quarter results before the market opens on Thursday, Feb. 20. Ahead of the event, analysts expect Southern to report a non-GAAP profit of $0.54 per share, down 15.6% from $0.64 per share reported in the year-ago quarter. However, the company has a robust earnings surprise. It has surpassed analysts’ EPS estimates in each of the past four quarters. Its adjusted EPS for the last reported quarter increased marginally to $1.43, exceeding the consensus estimates by 7.5%.
For the full fiscal 2024, Southern is expected to report an adjusted EPS of $4.04, up 10.7% from $3.65 in fiscal 2023. While in fiscal 2025, its earnings are expected to grow 6.9% year-over-year to $4.32 per share.
Southern’s stock has gained 19.5% over the past 52-week period, lagging behind the Utilities Select Sector SPDR Fund’s (XLU) 29.5% returns and the S&P 500 Index’s ($SPX) 25.8% surge during the same time frame.
Southern Company’s stock prices rose 1.9% after the release of its better-than-expected Q3 results on Oct. 31. The company reported a notable 4.2% year-over-year growth in revenues to $7.3 billion which surpassed analysts’ estimates by 2.1%. Meanwhile, due to higher utility revenues offsetting increased interest expense, depreciation and amortization, nonfuel operations and maintenance expenses, Southern’s operating income surged 7.2% year-over-year to $1.5 billion.
The consensus opinion on SO stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 21 analysts covering the stock, eight recommend “Strong Buy,” one advises “Moderate Buy,” 11 suggest “Hold,” and one advocates a “Strong Sell” rating. Its mean price target of $91.64 represents an 11.4% upside potential from current price levels.
