Southern Co Q3 preview: Is the utility on track for another strong earnings report?

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Southern Co (NYSE:SO) is scheduled to announce Q3 earnings results on Thursday, Oct. 27, before market open.

Consensus EPS estimate is $1.33 (+8.1% Y/Y) and consensus revenue estimate is $6.85B (+9.8% Y/Y).

over the last 2 years, SO has beaten EPS estimates 100% of the time and revenue estimates 75% of the time.

Over the last 3 months, EPS estimates have seen 5 upward revisions and 4 downward. Revenue estimates have seen 5 upward revisions.

Bank of America downgraded the utility after its recent outperformance. Attention will likely pivot back to fundamentals as Southern (SO) offers a below average 5.8% growth rate.

Meanwhile, KeyBanc upgraded Southern (SO) as the completion of the Vogtle 3 nuclear reactor should make it “a premium utility again”.

UBS also upgraded the stock, saying Southern’s (SO) “post-Vogtle growth profile should accelerate on fleet transformation opportunities to achieve [its] 2050 net zero carbon emissions goal”.

Southern (SO) stock edged higher after it posted better-than-expected Q2 results and bumped up the cost estimate for two Vogtle nuclear reactors under construction.

Recent news:

  • Southern’s (SO) Georgia Power said fuel loading started at the first of two new Vogtle nuclear reactors.
  • The company reportedly began a search to replace CEO Tom Fanning, who plans to announce his retirement by the end of the year.

SA contributor JR Research is of the view that Southern’s (SO) valuation is not attractive, warning investors that it’s still too early to consider adding the utility.

Shares of Southern (SO) slipped 3.2% YTD, but outperformed the S&P 500 and Dow Jones Utility indices.

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