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Southern Co. (SO) Gains But Lags Market: What You Should Know

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In the latest trading session, Southern Co. (SO) closed at $71.75, marking a +0.08% move from the previous day. This move lagged the S&P 500's daily gain of 2.76%. At the same time, the Dow added 2.43%, and the tech-heavy Nasdaq gained 0.25%.

Heading into today, shares of the power company had gained 9.63% over the past month, outpacing the Utilities sector's gain of 0.22% and the S&P 500's gain of 4.44% in that time.

Wall Street will be looking for positivity from Southern Co. as it approaches its next earnings report date. This is expected to be July 28, 2022. The company is expected to report EPS of $0.86, up 2.38% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.63 billion, up 8.24% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.57 per share and revenue of $24.82 billion. These totals would mark changes of +4.69% and +7.37%, respectively, from last year.

Any recent changes to analyst estimates for Southern Co. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.14% higher. Southern Co. is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Southern Co. is holding a Forward P/E ratio of 20.1. Its industry sports an average Forward P/E of 18.61, so we one might conclude that Southern Co. is trading at a premium comparatively.

Investors should also note that SO has a PEG ratio of 5.03 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Utility - Electric Power industry currently had an average PEG ratio of 3.21 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 95, putting it in the top 38% 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.

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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