Valued at a market cap of $101.3 billion, The Southern Company (SO) is a leading utility provider headquartered in Atlanta, Georgia. The company generates, transmits, and distributes electricity and natural gas, while also developing, acquiring, and managing power generation assets, including a growing portfolio of renewable energy projects.
Companies valued at $10 billion or more are typically classified as “large-cap stocks,” and SO fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the utilities - regulated electric industry. The company’s strength lies in its diversified energy portfolio and strong regional presence. Additionally, it stands out for its long-term investments in renewable energy and nuclear power projects, positioning it well for the transition to clean energy.
This utility giant is currently trading 5% below its 52-week high of $96.44, reached on Jul. 22. Shares of SO have gained 2.3% over the past three months, outperforming the Utilities Select Sector SPDR Fund’s (XLU) 1.7% return during the same time frame.
Moreover, on a YTD basis, SO is up 11.4%, outpacing XLU’s 10.8% rise. However, shares of SO have gained 3.1% over the past 52 weeks, lagging behind XLU's 10% uptick over the same time period.
To confirm its bullish trend, SO has been trading above its 200-day moving average over the past year, with slight fluctuations. However, it has been trading below its 50-day moving average since late August.
On Jul. 31, SO delivered its Q2 results. The company’s revenue improved 7.9% year-over-year to $7 billion, handily exceeding consensus estimates by 6.3%. Moreover, its adjusted EPS of $0.92 also surpassed analyst expectations. However, earnings were still down 16.4% compared to the year-ago quarter, which might have raised investor concerns over profitability, leading to a marginal drop in its share price following the earnings release.
SO has underperformed its rival, Duke Energy Corporation (DUK), which soared 4.9% over the past 52 weeks and 12.8% on a YTD basis.
Given SO’s recent outperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 20 analysts covering it, and the mean price target of $98.38 suggests a 7.3% premium to its current price levels.
