Southern Company (SO) Stock Forecast & Price Target

Southern's stock outlook is bolstered by an expected 8% electric load growth from 2025 to 2029, driven by in-migration and increasing demand from data centers and manufacturing activities. The company's strong financial position is further highlighted by a current funds from operations (FFO) to debt ratio of approximately 15.3%, with a management target of reaching 17% by the end of the forecast period, positioning it as an industry leader. Coupled with the upcoming holistic financial update in February, the positive metrics and growth prospects suggest a robust foundation for Southern's ongoing performance in the utilities sector.

Southern Company's dividend growth is approximately 2.5%, which is significantly lower than the industry average of around 5.5%, indicating a lack of competitiveness in shareholder returns. The company's projected 6% midpoint return is also beneath the average of its peer coverage, suggesting performance that is inconsistent with its premium market valuation. These factors contribute to a negative outlook as they reflect underwhelming returns relative to industry standards and a potential weakening in investor confidence.