Southern Company (SO) Stock Forecast & Price Target

Southern's stock outlook is bolstered by a projected 8% electric load growth from 2025 to 2029, driven by favorable factors such as in-migration, data centers, and manufacturing activity within the regions it serves. Furthermore, the company maintains a strong balance sheet, with funds from operations to debt (FFO/debt) ratio currently at approximately 15.3%, and management aims to elevate this metric to an industry-leading 17% by the end of the forecast period. These fundamental factors highlight Southern’s robust capacity for growth and financial stability, positioning it well within the utility sector.

Southern Company is experiencing slower dividend growth at approximately 2.5%, which is significantly below the industry average of around 5.5%, indicating potential weaknesses in its financial performance relative to its peers. The company's 6% midpoint return is now below the average of comparable firms, suggesting that its valuation may be inconsistent with its current financial metrics. Overall, these factors contribute to a negative outlook on Southern’s stock, as they raise concerns about the company's capacity to deliver competitive shareholder returns.