Southern Company Reports Strong Q3, Stock Set for Growth

Atlanta-based Southern Company (SO) is a major player in electricity generation and distribution, boasting a market cap of $91.2 billion. Serving over 9 million customers across states like Mississippi, Alabama, Georgia, and Tennessee, it ranks as one of the largest utility companies in the U.S.

Recent Performance and Market Comparison

Over the past year, Southern Company has exceeded market performance, with SO stock rising 24.8% compared to the S&P 500 Index’s 22.6% during the same period. However, year-to-date, Southern’s gains of 1.9% have fallen short of the SPX’s 3.1% increase in 2025.

In the utility sector, Southern Company’s performance has also been eclipsed by the Utilities Select Sector SPDR Fund (XLU), which reported a 30.2% increase in the past year and a 3.6% rise in 2025.

Strong Q3 Earnings Boost Investor Confidence

On October 31, Southern Company’s stock rose 1.9% following the release of its Q3 earnings, which exceeded analysts’ expectations. The company reported a 4.2% increase in revenues year-over-year, totaling $7.3 billion. This figure beat forecasts by 2.1%. Southern’s operating income also grew 7.2% year-over-year to $1.5 billion, thanks to increased utility revenues that offset higher interest expenses and operational costs. Its adjusted earnings per share (EPS) of $1.43 surpassed expectations by 7.5%, enhancing investor confidence.

Future Earnings Outlook and Analyst Ratings

Looking ahead, Southern Company is expected to announce its fiscal 2024 results later this month. Analysts predict earnings will rise 11% year-over-year to $4.05. Notably, Southern has a strong record of exceeding bottom-line expectations, having done so in the past four quarters.

Currently, among the 21 analysts offering insights on SO stock, the consensus rating is a “Moderate Buy.” This includes seven “Strong Buy,” one “Moderate Buy,” 12 “Hold,” and one “Strong Sell” rating.

However, this outlook is slightly less optimistic than last month, when eight analysts issued “Strong Buy” recommendations.

On February 3, Mizuho Securities analyst Anthony Crowdel reiterated a “Hold” on SO, while adjusting the price target to $85. Southern’s average price target stands at $91.36, suggesting an 8.9% premium over current prices. The highest street target of $104 indicates an upside potential of 24%.

On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. The information provided here is for informational use only. For further details, please see the Barchart Disclosure Policy.

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