Southern Co. (SO) PT Raised to $90 at Argus

Argus analyst Marie Ferguson raised the price target on Southern Co. (NYSE: SO) to $90.00 (from $75.00) while maintaining a Buy rating.

The analyst comments "We are maintaining our BUY rating on Focus List selection Southern Co. (NYSE: SO). Southern is one of the largest U.S. utilities, with a well-run base of regulated assets and a presence in states with favorable population trends, such as Georgia. The company faced delays and cost overruns in the construction of its two new Vogtle nuclear-generating plants. However, Vogtle 3 became operational in July 2023, and Vogtle 4 became fully operational last month. Looking ahead, we expect earnings to benefit from the reduction and potential credit for Vogtle construction losses, as well as from the lower operating costs of the new nuclear plants. As a result, we are raising our target price to $90 from $75. The company has gas and electric operations but, in 2023, about 65% of revenues were from retail electric sales. Southern is retiring its coal-fired plants and increasing its use of renewables ? a shift in the generation mix that should lead to favorable regulatory rates and cost recoveries. We think the company’s platform for growth is solid. Management is guiding for above-average growth. When added to SO’s record of consistent dividend growth and typical 3% annual increases, the shares could appeal to income investors. We also expect the shares to participate in favorable sector rotation as interest rates come down."

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