Southern’s $13 Billion Electrification Push Might Change The Case For Investing In Southern (SO)

• In recent weeks, Southern Company advanced its electrification agenda by filing for regulatory approval of up to 10 gigawatts of new generation capacity and announcing US$13 billion in planned capital investment across Alabama, Georgia, and Mississippi.
• This expansion signals a transformative effort to modernize regional energy infrastructure, supporting growth in industrial loads and further establishing the company’s leadership in clean energy and large-scale electrification initiatives.
• We'll explore how Southern's regulatory filings for new generation capacity and capital investment could influence its investment narrative and long-term outlook.

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Southern Investment Narrative Recap

To be a shareholder in Southern Company, you need to believe in the Southeastern U.S. power demand story, the company’s ability to recover costs on enormous capital programs, and the regulatory support for electrification initiatives. The recent regulatory filings for 10 GW of new generation and US$13 billion capital investment amplify the importance of large-load growth as the key near-term catalyst, but also spotlight the risk around unforeseen project costs; so far, this news does not materially shift the biggest risk, persistent cost inflation and uncertainty about long-term demand sustainability.

Among Southern’s latest announcements, the filing for regulatory approval of major capacity additions is most relevant. This move directly supports the company’s case for future earnings and rate base growth, as surging industrial and data center demand could translate into meaningful returns if these projects are completed on budget and with regulatory backing. Yet, Southern’s heavy reliance on regulatory approvals and disciplined project execution means that any setbacks could quickly alter its outlook.

But with so much capital at risk and cost pressures mounting, investors also need to watch for signals that...

Read the full narrative on Southern (it's free!)

Southern's outlook anticipates $31.7 billion in revenue and $5.8 billion in earnings by 2028. This projection is based on a 3.8% annual revenue growth rate and a $1.5 billion increase in earnings from the current $4.3 billion.

Uncover how Southern's forecasts yield a $97.15 fair value, in line with its current price.

Exploring Other Perspectives

Three Simply Wall St Community fair value estimates for Southern range widely from US$92.53 to US$225.94 per share. With sharp increases in capital spending and equity issuance looming, the path to long-term earnings growth remains a topic for debate and deeper consideration.

Explore 3 other fair value estimates on Southern - why the stock might be worth over 2x more than the current price!

Build Your Own Southern Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Southern research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Southern research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Southern's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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