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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 at $43.92 in the latest trading session, marking a -0.07% move from the prior day. This change lagged the S&P 500's 0.85% gain on the day. At the same time, the Dow added 1.15%, and the tech-heavy Nasdaq gained 0.77%.

Coming into today, shares of the power company had lost 5.57% in the past month. In that same time, the Utilities sector lost 3.73%, while the S&P 500 lost 9.35%.

Investors will be hoping for strength from SO as it approaches its next earnings release, which is expected to be February 20, 2019. In that report, analysts expect SO to post earnings of $1.07 per share. This would mark year-over-year growth of 109.8%. Our most recent consensus estimate is calling for quarterly revenue of $5.35 billion, down 4.88% 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. The Zacks Consensus EPS estimate has moved 0.12% lower within the past month. SO is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, SO is currently trading at a Forward P/E ratio of 14.51. This valuation marks a discount compared to its industry's average Forward P/E of 18.17.

Investors should also note that SO has a PEG ratio of 3.22 right now. 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 3.28 based on yesterday's closing prices.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 94, putting it in the top 37% 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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