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

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Southern Co. (SO - Free Report) closed the most recent trading day at $44.90, moving -0.29% from the previous trading session. This move lagged the S&P 500's daily gain of 0.65%. Elsewhere, the Dow gained 0.79%, while the tech-heavy Nasdaq added 1.01%.

Heading into today, shares of the power company had gained 5.23% over the past month, outpacing the Utilities sector's gain of 0.98% and the S&P 500's loss of 6.82% in that time.

Investors will be hoping for strength from SO as it approaches its next earnings release, which is expected to be November 7, 2018. In that report, analysts expect SO to post earnings of $1.07 per share. This would mark a year-over-year decline of 4.46%. Our most recent consensus estimate is calling for quarterly revenue of $6.01 billion, down 3.06% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3 per share and revenue of $23.12 billion. These totals would mark changes of -0.66% and +0.37%, respectively, from last year.

Investors might also notice 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.97% higher. SO currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, SO is holding a Forward P/E ratio of 15. This valuation marks a discount compared to its industry's average Forward P/E of 17.71.

We can also see that SO currently has a PEG ratio of 3.33. 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 was holding an average PEG ratio of 3.33 at yesterday's closing price.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 73, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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