This Southern Co Analyst Is Turning Bullish: 'Its Justifies One Of The Highest Premiums'

Shares of Southern Co SO remained highly volatile in early trading on Thursday.

The company’s “heightened focus on regulatory health,” strong balance sheet, and execution is likely to drive its relative performance in 2024, according to BMO Capital Markets.

The Southern Co Analyst: James Thalacker upgraded the rating for Southern Co from Market Perform to Outperform, while raising the price target from $72 to $77.

The Southern Co Thesis: Although the stock was among the best performers in 2023, there seems to be runway, as its profile “justifies one of the highest premiums in the group,” Thalacker said in the upgrade note.

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“The primary regulatory focus for the year will be the company’s GA IRP where they requested a decision by April,” the analyst wrote.

While management indicated that Southern Co has more than $45 billion of identified opportunities, additional capital opportunities are expected, “underpinned by a strong regional economy as a differentiator that bolsters the company’s position within their long-term 5-7% EPS growth rate and provides a long runway of visibility,” he added.

“Furthermore, when coupled with their quiet regulatory calendar in 2024, we believe investors will be willing to ascribe an even higher premium to SO’s jurisdictions as they seek regulatory certainty and other jurisdictions continue to deteriorate,” Thalacker stated.

SO Price Action: Shares of Southern Co had declined by 0.07% to $71.78 at the time of publication Thursday.