Southern Co. (SO) closed at $67.22 in the latest trading session, marking a -0.75% move from the prior day. This change lagged the S&P 500’s 0.18% gain on the day. Elsewhere, the Dow gained 0.33%, while the tech-heavy Nasdaq lost 0.02%.
Prior to today’s trading, shares of the power company had lost 1.3% over the past month. This has was narrower than the Utilities sector’s loss of 6.08% and the S&P 500’s loss of 1.63% in that time.
Southern Co. will be looking to display strength as it nears its next earnings release. On that day, Southern Co. is projected to report earnings of $1.38 per share, which would represent year-over-year growth of 5.34%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $8.47 billion, up 1.04% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.60 per share and revenue of $27.78 billion. These totals would mark changes of 0% and -5.1%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Southern Co.Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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 0.03% lower. Southern Co. currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Southern Co. is currently trading at a Forward P/E ratio of 19.07. For comparison, its industry has an average Forward P/E of 15.94, which means Southern Co. is trading at a premium to the group.
Investors should also note that SO has a PEG ratio of 4.77 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. Utility – Electric Power stocks are, on average, holding a PEG ratio of 2.73 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 109, putting it in the top 44% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
To follow SO in the coming trading sessions, be sure to utilize Zacks.com.
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