SONYSE·Regulated Electric

The Southern Company SO

Market cap $94.6BP/E 19.9× trailingGross margin 43.4%Reports Thu 29 Oct, before the open

$82.22

−0.67 (−0.81%)live 11:20 ET

52-wk $82.14 – $100.84

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Orin's take

0.62conviction · moderate

Refreshed 24 Sep · take v9. A new filing or a print queues the next refresh.

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Southern Company is a buy at current levels following a sharp pullback that has left the stock deeply oversold (RSI 21.5 as of 2026-09-24) and trading at $82.89, well below its 50-day MA of $90.80 and 200-day MA of $92.22. Quarterly EPS is inflecting positively — Q2 2026 EPS of $1.03 versus $0.80 in Q2 2025, with positive earnings surprises of 11.9% and 9.1% in the last two reported quarters — suggesting the record capex build is beginning to convert into earnings power.

Valuation is reasonable with EV/EBITDA of 11.95 versus a peer median of 13.67 (a 12.6% discount), and the Georgia Power-Google nuclear agreement announced September 2026 reinforces the long-term data center demand thesis. The key tension remains negative FCF of -$2.935B in FY2025 and total debt of $74.075B, but improving quarterly earnings and a discounted valuation on an oversold tape tilt the risk/reward favorably.

What could go wrong

Negative free cash flow. FY2025 FCF was -$2.935B with capex of $12.737B, a sharp deterioration from FY2024 FCF of $0.833B. Sustained negative FCF could pressure the balance sheet and dividend sustainability.
Rising leverage. Total debt climbed to $74.075B in FY2025 from $66.277B in FY2024, increasing financial risk if interest rates remain elevated or rate cases are unfavorable.
Insider selling. Over the trailing 24 months, insiders net sold $33.598M in value across 129 dispositions versus 139 acquisitions, with recent September 2026 transactions predominantly sales at prices above the current $82.89 close.
Smart money fading. Smart money score declined from 0.0903 as of 2025-06-30 to 0.0323 as of 2026-06-30, with fund count dropping from 56 to 62 but conviction weakening, suggesting institutional enthusiasm is cooling.

What would change my mind

FCF recovery. Next annual or semiannual FCF turns positive or capex declines meaningfully from the $12.737B FY2025 level, indicating the capex cycle is peaking.bullish

Rate case or regulatory setback. A major regulatory commission denies or materially reduces Southern's requested rate relief or allowed ROE, impairing the earnings growth trajectory.bearish

Technical breakdown below support. Stock closes below $80 on heavy volume, confirming the downtrend despite oversold readings and invalidating the mean-reversion thesis.bearish

Sustained EPS acceleration. Q3 2026 EPS exceeds $1.54 (the Q3 2025 level) with another positive earnings surprise, confirming the quarterly EPS inflection is durable.bullish

Where this comes from: Technicals as of 2026-09-24 · Quarterly results, quarters ended 2026-06-30 and 2025-06-30 · Earnings surprises, period ends 2026-07-30 and 2026-04-30 · Peer relative comparison. Orin's read on SO; not advice.

Twelve months actual closes to 2026-09-24 · actual filings

Sept 25Nov 25Jan 26Mar 26May 26Jul 26

50-day average 200-day average · volume below

On file

All SO filings

Form	Filed	What it says	Read
8-K	6 Aug	The Southern Company issued $833,750,000 of Series 2026A 2.125% Convertible Senior Notes due December 15, 2027, and $1,897,500,000 of Series 2026B 3.50% Convertible Senior Notes…	read
8-K	4 Aug	The Southern Company announced on August 3, 2026, the upsize and pricing of offerings for two tranches of convertible senior notes.	read
8-K	3 Aug	The Southern Company announced proposed private offerings of $650 million aggregate principal amount of convertible senior notes due 2027 and $1.5 billion aggregate principal…	read
8-K	30 Jul	The Southern Company reported its financial results for the three-month and six-month periods ended June 30, 2026, via a press release furnished as Exhibit 99.	read
10-Q	29 Jul	Southern Company reported consolidated net income attributable to Southern Company of $1.174 billion ($1.03 per diluted share) for the three months ended June 30, 2026, an…	read
8-K	8 Jun	The Southern Company entered into an Equity Distribution Agreement on June 8, 2026, allowing for the sale of up to 50,000,000 shares of common stock through various sales agents and forward purchasers.	read
8-K	15 May	Southern Company’s 8-K discloses only the results of its May 13, 2026 annual meeting; no operational or financial event is reported.	read
13G	14 May	—	on file

Largest holders · 13F Q2 2026

Money flow

Filer	Position	Of fund
Vanguard Capital Management	$7.1B	0.2% of fund
State Street	$6.2B	0.2% of fund
Capital World Investors	$6.0B	0.7% of fund
Price T Rowe Associates /Md/	$4.4B	0.4% of fund
Jpmorgan Chase &	$3.2B	0.2% of fund
Geode Capital Management	$2.8B	0.2% of fund

120 filers · quarter ended Q2 2026 · positions, not flows

Insiders, last 24 months: 268 Form 4 filings, net −$33.6M. Of the 50 on hand, 0 were open-market purchases and 10 sales— the rest are grants, option exercises and tax withholding.

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Where it trades

vs its own 5y · Utilities

Metric	Now	Own median	Sector
P/E	19.9×	21.7×	25.9×
EV/EBITDA	11.9×	11.8×	—
P/S	3.16×	3.15×	—
P/B	2.4×	2.6×	—

Its P/E sits 20th percentile of its own last 5 years (−0.75σ from its own mean).

What Wall Street published

34 firms · 2026-09-24

Consensus target

$97

$79 – $106 · +18% against today's price

How they rate it

10 buy or overweight
21 hold
3 underweight or sell

The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.

Against the companies it is compared to

median P/E 19.6× of 8 peers

Company	Market cap	P/E	EV/EBITDA	Gross	Net	ROE
SOThe Southern Company	$95B	19.9×	11.9×	43.4%	15.4%	13%
AEPAmerican Electric Power Company, Inc.	$64B	20.2×	13.6×	49.0%	13.9%	10%
CEGConstellation Energy Corporation	$94B	25.4×	13.9×	94.9%	11.1%	15%
DDominion Energy, Inc.	$53B	20.9×	14.5×	49.3%	13.9%	9%
DUKDuke Energy Corporation	$88B	17.0×	11.0×	68.2%	15.7%	10%
ETREntergy Corporation	$46B	24.8×	13.7×	38.9%	13.5%	10%
EXCExelon Corporation	$41B	14.7×	10.2×	24.5%	11.0%	10%
NEENextEra Energy, Inc.	$158B	16.9×	15.0×	71.8%	32.0%	17%
XELXcel Energy Inc.	$43B	19.0×	12.5×	48.8%	15.3%	10%

The median is of the 8 peers listed above and nothing else — check it against the column. This company trades 1.5% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.

What it has traded at

P/E by fiscal year

FY14 22.5×FY25 22.1×

What its sector has traded at

Utilities

FY14 14.0×FY26 27.4×

Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.

Discounted cash flow

not recomputed since

Model	Fair value	Against	Computed
Standard DCF	$26	$94.43 · −72%	2026-06-10
Levered DCF	$-150	$94.43 · −259%	2026-06-10

The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.

Every estimate on one scale

price $82.22

52-week range$83 – $101

Analyst targets$79 – $106

Standard DCF$26 as of 2026-06-10, when it was $94.43

Levered DCF$-150 as of 2026-06-10, when it was $94.43

At own 5y-median P/E (22×)$91

At 5y P/E range (19–30×)$80 – $126

At sector P/E (26×)$108

The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.