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Southern Co. (SO) Gains As Market Dips: What You Should Know

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Southern Co. (SO) closed the most recent trading day at $71.86, moving +0.93% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.3%. At the same time, the Dow lost 0.46%, and the tech-heavy Nasdaq lost 0.28%.

Prior to today's trading, shares of the power company had gained 6.96% over the past month. This has outpaced the Utilities sector's loss of 3.39% and the S&P 500's gain of 1.51% in that time.

Investors will be hoping for strength from Southern Co. as it approaches its next earnings release, which is expected to be July 28, 2022. On that day, Southern Co. is projected to report earnings of $0.86 per share, which would represent year-over-year growth of 2.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.62 billion, up 8.09% from the year-ago period.

SO's full-year Zacks Consensus Estimates are calling for earnings of $3.57 per share and revenue of $24.81 billion. These results would represent year-over-year changes of +4.69% and +7.33%, respectively.

Investors should also note any recent changes to analyst estimates for Southern Co.These recent revisions tend to reflect the evolving nature of short-term business trends. 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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. Southern Co. is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Southern Co.'s current valuation metrics, including its Forward P/E ratio of 19.97. For comparison, its industry has an average Forward P/E of 18.62, which means Southern Co. is trading at a premium to the group.

Investors should also note that SO has a PEG ratio of 4.99 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. SO's industry had an average PEG ratio of 3.16 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 35% 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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