Southern Company (SO) Stock Forecast & Price Target

Southern is projected to experience robust customer demand driven by factors such as in-migration, data centers, and manufacturing activity, leading to an anticipated 8% electric load growth from 2025-2029. The company's financial strength is underscored by a current funds from operations (FFO) to debt ratio of approximately 15.3%, with management aiming to improve this to 17% by the end of the forecast period, positioning Southern as a leader in the industry. Furthermore, the positive outlook is supported by a holistic financial update expected in February 2026, particularly in light of competitors raising their compound annual growth rates (CAGRs) recently.

The Southern Company’s dividend growth rate of approximately 2.5% is significantly lower than the industry average of around 5.5%, raising concerns about its competitiveness and attractiveness to investors. Additionally, the company's midpoint yield of 6% is below the average yield within its coverage, suggesting a disconnect between its premium valuation and its financial performance. These factors contribute to a negative outlook regarding Southern's stock, as they indicate potential challenges in maintaining shareholder value and investor interest.