The Southern Company (SO), a prominent leader in the energy sector, was founded in 1945 and is headquartered in Atlanta, Georgia. With a market cap of $97.7 billion, Southern Company operates one of the largest energy networks in the U.S. The company delivers reliable, sustainable energy through its electric utilities, natural gas distribution companies, and renewable energy projects, serving millions of customers across the Southeast.
Companies worth $10 billion or more are typically considered “large-cap stocks,” Southern Company comfortably falls into this category. This solidifies its position as a significant player in the utilities sector, reflecting its substantial size, influence, and industry leadership. Operating across multiple states in the Southeast, Southern Company provides energy to millions of customers.
Southern Company is down 7.1% from its 52-week high of $94.45, achieved on Oct. 24. Shares of Southern Company gained 1.6% over the three months, underperforming the broader S&P 500 Index ($SPX) 7.1% gains during the same time frame.
Over the longer term, SO has gained 25.2% on a YTD basis, slightly trailing the SPX’s 26.8% return. Similarly, over the past 52 weeks, SO's 22.7% gain fell short of the SPX's 31.6% increase.
To confirm the recent bearish trend, SO has traded below its 50-day moving average since late October. However, it has been trading above its 200-day moving average since mid-April.
Southern Company has faced recent underperformance relative to the broader market, influenced by rising interest rates, regulatory uncertainties in the energy sector, and increased competition from renewable energy alternatives, which challenge its traditional fossil fuel operations.
Despite these headwinds, the company delivered solid Q3 results released on Oct. 31, with the stock edging 1.9%. Revenue rose 4.2% year over year to $7.27 billion, exceeding analysts' expectations of $7.12 billion. EPS came in at $1.43, beating the estimate of $1.33 and showing modest growth compared to the prior-year quarter. This performance underscores Southern Company’s resilience amid a challenging operating environment.
Its rival, American Electric Power Company, Inc. (AEP), has gained 22% over the past 52 weeks and has risen 20.9% on a YTD basis, slightly lagging SO over the same time frame, respectively.
Analysts remain cautiously optimistic about SO stock's prospects despite the stock underperforming the broader sector. SO has a consensus rating of “Moderate Buy” from the 21 analysts covering the stock and has a mean price target of $93.36, suggesting a potential upside of 6.4% from its current price.
