Southern Company (The) (SO) Stock Forecasts

Summary

We have reviewed our recommended sector allocations this month, and have adjusted our current sector over-weight, under-weight, and market-weight recommendations for the calendar fourth quarter of 2024. Our multi-factor model includes a performance-ranking system, which assigns points for monthly, quarterly, and YTD sector performance versus the benchmark S&P 500; current sector P/E vs. five-year P/E, with points awarded for a discount to the S&P 500 current P/E; two-year earnings growth, with points awarded for exceeding the benchmark average and for EPS acceleration; relative performance to the sector group average; sector conviction based on the Argus BUY rating percentage; and PEG ratio, with points awarded or subtracted based on sector PEG ratios below or above the group average. This time, our process led to an upgrade of the Utilities sector to recommended over-weight from market-weight. Utility stocks have been positive throughout 2024 in anticipation of lower interest rates, and the sector has blasted off in the third quarter as that possibility became a likelihood. We also expect the Utilities sector to benefit from providi