Southern Co. stock price target maintained at $100 by Jefferies on growth outlook

Jefferies reiterated its Buy rating and $100 price target on Southern Co. (NYSE:SO), having recently upgraded the stock, while Scotiabank maintained its Sector Outperform rating. This positive outlook follows Southern Co.'s strong Q1 2025 earnings beat, with EPS of $1.23 and revenue of $7.78 billion exceeding forecasts. Analysts highlight significant capital deployment opportunities, including $10-15 billion from its Georgia Integrated Resource Plan, driven by accelerating data center demand across its service territory. Regulatory stability, evidenced by an intact 11.9% return on equity band through 2028, underpins projected 6-7% rate base growth extending beyond current planning horizons, collectively underscoring Southern Co.'s robust long-term growth prospects and financial stability.

Analysis

Southern Co. (SO) is demonstrating a compelling combination of growth and stability, validated by strong sell-side sentiment including a reiterated Buy rating and a $100 price target from Jefferies. This positive outlook is supported by a robust first-quarter 2025 earnings report, where the company surpassed expectations with an EPS of $1.23 and revenue of $7.78 billion. The primary catalyst for future growth is the Georgia Integrated Resource Plan, which provides a clear pathway for $10-15 billion in upside capital deployment, directly addressing accelerating demand from data centers in its service territory. This growth is underpinned by significant regulatory certainty, as evidenced by an intact 11.9% return on equity (ROE) band through 2028, which supports a projected 6-7% rate base growth beyond current horizons. While the stock's 21.2% return over the past year and current trading level near its 52-week high suggest a rich valuation, its low beta of 0.37 highlights its defensive characteristics within a growth narrative.

Key Decisions for Investors

• Given the clear catalysts from data center demand and the Georgia IRP, investors could view Southern Co. as a core utility holding, capitalizing on the projected 6-7% rate base growth and regulatory stability.
• With the stock trading near its 52-week high and above some fair value models, prospective investors should consider the valuation risk and may prefer to build a position on any potential market pullbacks.
• It is critical to monitor the execution and capital deployment progress related to the Georgia Integrated Resource Plan, as this is the central pillar of the forward-looking growth thesis presented by analysts.