Wells Fargo Downgrades Southern Co. (SO) to Market Perform; Valuation Call

January 3, 2012 7:47 AM EST
Get Alerts SO Hot Sheet
Price: $49.06 +0.02%

Rating Summary:
    2 Buy, 16 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Wells Fargo downgraded Southern Co. (NYSE: SO) from Outperform to Market Perform, price target range raised from $45-46 to $48-49.

Wells analyst says, "We are downgrading shares of SO largely due to valuation considerations. Shares trade at 10-15% P/E multiple premiums versus the Regulated Electric Utility median on our 2012-14 EPS estimates. We believe the premium valuation is justified given SO’s strong fundamentals which include a low risk regulated strategy, sizeable forecasted rate base growth, constructive regulatory environments,
industry leading management team and solid balance sheet. We consider SO to be one of the most fundamentally sound utilities in our coverage universe and we continue to project healthy 5-year compound annual growth rates of roughly 6% and 4% for EPS and DPS (dividend per share), respectively."

For an analyst ratings summary and ratings history on Southern Co. click here. For more ratings news on Southern Co. click here.

Shares of Southern Co. closed at $46.29 yesterday.

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