Southern Co. (SO) PT Raised to $60 at Mizuho Securities Despite Cable Separation Issues at Vogtle Unit 3

Mizuho Securities analyst Paul Fremont raised the price target on Southern Co. (NYSE: SO) to $60.00 (from $57.00) while maintaining a Underperform rating after the company acknowledged to the NRC that the cable separation issues at Vogtle Unit 3 met the criteria for a significant breakdown in its quality assurance program, the NRC issued a preliminary white and greater than green finding that may move Vogtle Unit 3 into the NRC’s Column 1, resulting in enhanced NRC supervision.

The analyst raised the PT due to peer multiples and stated "We already know of two instances of faulty construction: the cable separation that was the topic of the special NRC investigation, and massive leaks in the spent fuel pool due to improper welds. Enhanced NRC oversight will likely result in material schedule delays and cost overruns at the project." He went on to state "Assuming 15 ITAAC approvals each month (the maximum monthly number approved so far), it would require 13 months to clear the remaining 190 ITAACs required to load fuel. That would likely delay fuel load to next summer, with commercial operation estimated by Mizuho to be six months later."

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