Southern Co. (SO) Outperforms Broader Market: What You Need to Know

Southern Co. (SO) ended the recent trading session at $99.11, demonstrating a +1.12% change from the preceding day's closing price. This change outpaced the S&P 500's 1.01% gain on the day. Meanwhile, the Dow experienced a rise of 0.83%, and the technology-dominated Nasdaq saw an increase of 1.22%.

Prior to today's trading, shares of the power company had gained 3.22% outpaced the Utilities sector's loss of 0.85% and the S&P 500's loss of 2.86%.

Market participants will be closely following the financial results of Southern Co. in its upcoming release. The company's upcoming EPS is projected at $1.21, signifying a 1.63% drop compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $8.08 billion, indicating a 3.94% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $4.58 per share and revenue of $30.52 billion, which would represent changes of +6.51% and +3.27%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Southern Co. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% higher. Southern Co. is currently a Zacks Rank #3 (Hold).

Looking at valuation, Southern Co. is presently trading at a Forward P/E ratio of 21.39. This indicates a premium in contrast to its industry's Forward P/E of 18.86.

Investors should also note that SO has a PEG ratio of 2.96 right now. 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. As the market closed yesterday, the Utility - Electric Power industry was having an average PEG ratio of 2.82.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 88, putting it in the top 36% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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Southern Company (The) (SO): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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