Southern (SO): Assessing Valuation After Georgia Capex Settlement and Analyst Target Cuts

Southern (SO) just agreed to a settlement in Georgia’s All Source Request for Proposals that could lift its capital spending by about $4 billion, and the stock is already reflecting that shift.

See our latest analysis for Southern.

The stock’s muted 1 day share price move and softer 1 month share price return come after this capex heavy settlement. Yet a 1 year total shareholder return of 6.6 percent and a five year total shareholder return of about 70 percent suggest long term momentum remains intact rather than broken.

If you are weighing how this kind of capex story fits into a wider utilities style portfolio, it could be worth scanning for other fast growing stocks with high insider ownership that might offer a different balance of growth and conviction.

With analysts trimming targets even as Southern still trades at a double digit discount to consensus, investors now face a key question: is this a rare entry point into a regulated growth story, or is the market already pricing in tomorrow’s earnings?

Most Popular Narrative: 14.9% Undervalued

With Southern closing at $84.44 against a narrative fair value near $99, the story frames today’s price as lagging its long term earnings power.

The expansion of large scale electrification projects including hyperscaler data centers and industrial developments across Alabama, Georgia, and Mississippi is materially increasing Southern's load outlook, resulting in regulatory approvals and filings for up to 10 GW of new generation and $13 billion of incremental capital investment, driving long term earnings and rate base growth.

Read the complete narrative.

Want to see how steady, regulated growth, rising margins, and a richer future earnings multiple all connect into that valuation gap? The narrative joins those dots in detail.

Result: Fair Value of $99.23 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, elevated capex, potential equity dilution, and any wobble in regulatory support could quickly crimp earnings momentum and close today’s apparent valuation gap.

Find out about the key risks to this Southern narrative.

Build Your Own Southern Narrative

If you want to challenge this view or rely on your own research instead, you can build a personalized narrative in just a few minutes: Do it your way

A great starting point for your Southern research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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