The Bull Case For Southern (SO) Could Change Following Strong Q3 Revenue and Earnings Beat

• Southern Company recently reported third-quarter earnings that exceeded analyst expectations, highlighted by a 7.5% year-over-year revenue increase and an 11.9% rise in adjusted earnings per share.
• This performance stands out as it was achieved despite the company's shares underperforming the broader Utilities sector and lagging behind their historical highs earlier in 2025.
• We'll explore how Southern's strong quarterly revenue and earnings results could influence the outlook for its long-term investment case.

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Southern Investment Narrative Recap

To be a Southern Company shareholder, you typically need to believe in the long-term stability of regulated electricity markets and the potential for sustained growth driven by rising Southeast U.S. demand. The company’s stronger-than-expected third-quarter earnings provide short-term support to its core narrative, but do not materially reduce the current near-term risk of shareholder dilution because of Southern’s increased equity funding plans, which remain a key watchpoint as capital needs grow.

The recent announcement of a $1.75 billion composite units equity offering is most relevant in this context, as it directly addresses Southern’s strategy to fund its expanded $76 billion capital plan. While the third-quarter revenue and EPS beat may boost market confidence temporarily, the impact of incremental equity issuance on future earnings per share and return metrics remains a central question for the business moving forward.

In contrast to the positive earnings news, investors should be aware of how additional equity raises could affect...

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

Southern's narrative projects $31.7 billion revenue and $5.8 billion earnings by 2028. This requires 3.8% yearly revenue growth and a $1.5 billion earnings increase from $4.3 billion today.

Uncover how Southern's forecasts yield a $99.32 fair value, a 9% upside to its current price.

Exploring Other Perspectives

Three individual fair value estimates from the Simply Wall St Community range widely between US$92.53 and US$293.16. With capital needs prompting further equity offerings, market participants should consider how this may influence Southern’s future financial flexibility and shareholder value outcomes.

Explore 3 other fair value estimates on Southern - why the stock might be worth over 3x 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 2 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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