Morgan Stanley Sees Utilities Lagging as it Lowers Southern Company (SO) Target

With an annual dividend yield of 3.22%, The Southern Company (NYSE:SO) is included among the 10 High Yield Stocks for Lasting Retirement Income.

On May 21, Morgan Stanley analyst David Arcaro lowered the firm’s price recommendation on The Southern Company (NYSE:SO) to $87 from $92. He reiterated an Underweight rating on the shares. The analyst said the firm updated its price targets for Regulated & Diversified Utilities and IPPs across North America for April. Morgan Stanley also noted that utilities lagged the S&P’s return during the month.

Earlier in the month, on May 1, Raymond James raised its price goal on SO to $104 from $103. It kept an Outperform rating on the stock. The analyst said the company continues to execute well, backed by solid demand visibility, a large contracted load pipeline, and an $81B regulated capital expenditure plan expected to support 9% rate base growth through 2030. The research note also pointed to improving financing clarity, which the firm believes gives Southern Company more flexibility as investments increase. The analyst added that there could still be more upside for the stock despite only modest gains following earnings.

The Southern Company (NYSE:SO) is an energy provider that owns three traditional electric operating companies, along with Southern Power Company and Southern Company Gas. Its electric utilities, Alabama Power, Georgia Power, and Mississippi Power, provide electricity to retail customers across three Southeastern states, as well as wholesale customers throughout the Southeast.

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