Southern (SO) Downgraded by Zacks Investment Research

Zacks Investment Research lowered shares of Southern (NYSE:SO) from a buy rating to a hold rating in a research note released on Wednesday.

According to Zacks, “Southern Company is one of the largest and best-managed electric utility holding companies in the United States, dominating the power business across the southeastern region. With good rate base growth and constructive regulation, it is expected to generate steady earnings and dividend growth in the coming years through long-term power contracts. Additionally, SO's $12 billion AGL Resources buy has significantly increased its customer base and diversified offerings. However, continued timing and cost overrun issues over two large construction projects – Vogtle and Kemper – are major overhangs. While the $25 billion Vogtle nuclear plant has gone well over budget and is years behind schedule, Southern's Kemper project suffered yet another setback with the suspension of all coal gasification operations amid additional cost burden. Hence, Southern Company warrants a cautious stance from the investors.”

A number of other research analysts have also commented on SO. SunTrust Banks reaffirmed a hold rating and issued a $47.00 price objective on shares of Southern in a report on Monday, January 7th. Guggenheim reaffirmed a hold rating and issued a $44.00 price objective on shares of Southern in a report on Monday, January 7th. Mizuho reaffirmed a hold rating and issued a $46.00 price objective on shares of Southern in a report on Tuesday, December 11th. ValuEngine raised Southern from a sell rating to a hold rating in a report on Friday, October 19th. Finally, Barclays upped their price objective on Southern from $48.00 to $49.00 and gave the company a hold rating in a report on Monday, November 19th. Five research analysts have rated the stock with a sell rating and eleven have assigned a hold rating to the stock. The company currently has an average rating of Hold and an average target price of $46.07.

SO opened at $46.61 on Wednesday. Southern has a 1-year low of $42.38 and a 1-year high of $49.43. The company has a current ratio of 0.72, a quick ratio of 0.58 and a debt-to-equity ratio of 1.48. The firm has a market capitalization of $46.80 billion, a P/E ratio of 15.43, a price-to-earnings-growth ratio of 3.36 and a beta of 0.07.

Southern (NYSE:SO) last posted its quarterly earnings results on Wednesday, November 7th. The utilities provider reported $1.14 earnings per share for the quarter, beating analysts’ consensus estimates of $1.07 by $0.07. Southern had a return on equity of 12.88% and a net margin of 10.35%. The business had revenue of $6.70 billion for the quarter, compared to analysts’ expectations of $6.68 billion. During the same quarter in the prior year, the business earned $1.12 EPS. The firm’s revenue for the quarter was up 8.0% on a year-over-year basis. As a group, equities analysts expect that Southern will post 3.03 earnings per share for the current year.

In other news, CEO Kimberly S. Greene sold 15,000 shares of the stock in a transaction on Monday, December 3rd. The stock was sold at an average price of $47.03, for a total transaction of $705,450.00. Following the sale, the chief executive officer now directly owns 9,380 shares of the company’s stock, valued at approximately $441,141.40. The transaction was disclosed in a legal filing with the SEC, which is accessible through the SEC website. Also, insider Mark Lantrip sold 9,000 shares of the stock in a transaction on Tuesday, December 4th. The stock was sold at an average price of $47.58, for a total value of $428,220.00. The disclosure for this sale can be found here. Corporate insiders own 0.73% of the company’s stock.

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Griffin Asset Management Inc. lifted its position in shares of Southern by 0.7% during the 3rd quarter. Griffin Asset Management Inc. now owns 53,323 shares of the utilities provider’s stock worth $2,325,000 after buying an additional 384 shares during the last quarter. First National Bank of Mount Dora Trust Investment Services lifted its position in shares of Southern by 4.5% during the 4th quarter. First National Bank of Mount Dora Trust Investment Services now owns 9,335 shares of the utilities provider’s stock worth $410,000 after buying an additional 400 shares during the last quarter. United Capital Management of KS Inc. lifted its position in shares of Southern by 5.4% during the 4th quarter. United Capital Management of KS Inc. now owns 8,208 shares of the utilities provider’s stock worth $361,000 after buying an additional 424 shares during the last quarter. Sound Income Strategies LLC lifted its position in shares of Southern by 19.9% during the 4th quarter. Sound Income Strategies LLC now owns 3,423 shares of the utilities provider’s stock worth $150,000 after buying an additional 568 shares during the last quarter. Finally, Moody National Bank Trust Division lifted its position in shares of Southern by 3.6% during the 4th quarter. Moody National Bank Trust Division now owns 18,448 shares of the utilities provider’s stock worth $811,000 after buying an additional 633 shares during the last quarter. 56.52% of the stock is currently owned by institutional investors.

About Southern

The Southern Company, through its subsidiaries, engages in the generation, transmission, and distribution of electricity. The company also constructs, acquires, owns, and manages power generation assets, including renewable energy facilities and sells electricity in the wholesale market; and distributes natural gas in Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland, as well as provides gas marketing services, wholesale gas services, and gas midstream operations.

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