Southern Co. (SO) Gains But Lags Market: What You Should Know
Southern Co. (SO) closed at $56.02 in the latest trading session, marking a +0.5% move from the prior day. This change lagged the S&P 500's 0.95% gain on the day. Meanwhile, the Dow gained 0.94%, and the Nasdaq, a tech-heavy index, added 0.8%.
Prior to today's trading, shares of the power company had gained 3.01% over the past month. This has lagged the Utilities sector's gain of 4.45% and outpaced the S&P 500's gain of 2.47% in that time.
SO will be looking to display strength as it nears its next earnings release. In that report, analysts expect SO to post earnings of $0.71 per share. This would mark a year-over-year decline of 11.25%. Our most recent consensus estimate is calling for quarterly revenue of $5.04 billion, down 10.34% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $3.03 per share and revenue of $22.35 billion, which would represent changes of -1.3% and -4.86%, respectively, from the prior year.
Any recent changes to analyst estimates for SO should also be noted by investors. 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.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.18% higher within the past month. SO is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that SO has a Forward P/E ratio of 18.39 right now. This represents a discount compared to its industry's average Forward P/E of 20.32.
It is also worth noting that SO currently has a PEG ratio of 4.09. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Utility - Electric Power stocks are, on average, holding a PEG ratio of 3.88 based on yesterday's closing prices.
The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 151, which puts it in the bottom 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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