Jefferies Downgrades Southern Company to "Hold" (SO)

Jefferies Downgrades Southern Company to “Hold” (SO)


Utility firm The Southern Company (SO) was downgraded by Jefferies on Friday, as the analyst believe the stock’s current price is fairly valued.

The analsyts downgraded SO from “Buy” to “Hold” and now see shares reaching $46, down from the previous price target of $53.50. This new valuation suggests a 3% upside to Thursday’s closing price of $44.65.

Jefferies analyst Paul Fremont commented, “With the current investor focus over lower ROEs and cost over-runs at the Kemper County IGCC plant, Jefferies believes that the stock will continue to trade at a group average P/E multiple versus its historical 5-15% premium. Our upgrade was predicated on trading SO at a premium multiple, so we have revised our price target to reflect our updated views and believe the stock is fair value at current levels.”

Southern Company shares were inactive during pre-market trading on Friday. The stock is up +4.3% year-to-date.

The Bottom Line
Shares of Southern Company (SO) have a dividend yield of 4.55% based on last night’s closing price of $44.65 and the company’s annualized dividend payout of $2.03 per share.

The Southern Company (SO) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.