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    Should Election-Year Risk Downgrades Require Action From Southern (SO) Investors?

    Simply Wall St·01/07/2026 15:27:01
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    • Morgan Stanley recently downgraded The Southern Company to an underweight rating, while UBS and JPMorgan maintained neutral stances but cited heightened political and regulatory risks during an election year.
    • These cautious analyst views contrast with Southern’s appeal as a dividend-focused, regulated utility investing in renewables, nuclear, and grid modernization for long-term relevance.
    • Next, we’ll examine how growing political and regulatory concerns during an election year may reshape Southern’s established investment narrative.

    Trump has pledged to "unleash" American oil and gas and these 22 US stocks have developments that are poised to benefit.

    Southern Investment Narrative Recap

    To own Southern, you generally have to believe in the appeal of a dividend-focused, regulated utility that is spending heavily to stay relevant through renewables, nuclear and grid upgrades. The key near term catalyst remains how regulators treat its expanding capital plan, while the biggest current risk is that political and regulatory pushback could limit rate base growth. The latest analyst downgrades highlight this risk but do not appear to change Southern’s fundamental, income-oriented profile.

    Against this backdrop, Southern’s continued pattern of regular quarterly dividends, including the recent affirmation of a 74 cent per share payout, stands out as particularly relevant. This dividend history reinforces why many income oriented investors follow the stock closely, even as capital needs rise and analysts flag election year regulatory uncertainty. How regulators ultimately respond to Southern’s growing investment agenda will be critical for supporting both its dividend and long term earnings power.

    Yet behind the income appeal, investors should be aware that elevated capital spending still depends on sustained regulatory support...

    Read the full narrative on Southern (it's free!)

    Southern's narrative projects $31.7 billion revenue and $5.8 billion earnings by 2028.

    Uncover how Southern's forecasts yield a $99.22 fair value, a 13% upside to its current price.

    Exploring Other Perspectives

    SO 1-Year Stock Price Chart
    SO 1-Year Stock Price Chart

    Four members of the Simply Wall St Community currently estimate Southern’s fair value between US$92.53 and US$257.33, reflecting very different expectations. You should weigh these views against the heightened political and regulatory risk around future rate base expansion and consider how that might affect Southern’s ability to grow earnings over time.

    Explore 4 other fair value estimates on Southern - why the stock might be worth just $92.53!

    Build Your Own Southern Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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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.