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

Zacks Equity Research

Southern Co. (SO) closed the most recent trading day at $70.05, moving +0.44% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.01%. Elsewhere, the Dow gained 0.66%, while the tech-heavy Nasdaq added 1.43%.

Coming into today, shares of the power company had gained 10.1% in the past month. In that same time, the Utilities sector gained 4.01%, while the S&P 500 gained 0.19%.

SO will be looking to display strength as it nears its next earnings release. On that day, SO is projected to report earnings of $0.26 per share, which would represent year-over-year growth of 4%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.02 billion, down 5.89% from the year-ago period.

Investors should also note any recent changes to analyst estimates for SO. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.16% lower. SO is currently a Zacks Rank #3 (Hold).

Looking at its valuation, SO is holding a Forward P/E ratio of 21.99. This valuation marks a premium compared to its industry's average Forward P/E of 20.52.

Meanwhile, SO's PEG ratio is currently 4.89. 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. Utility - Electric Power stocks are, on average, holding a PEG ratio of 4.08 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 108, which puts it in the top 43% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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