Southern Co. (SO) Stock Higher on Barclays Rating Upgrade
NEW YORK (TheStreet) -- Shares of SouthernCo. (SO) - Get Report are up by 0.67% to $53.49 in early-morning trading on Thursday, as the company's rating was raised to "overweight" from "equal weight" at Barclays earlier today.
Additionally, the firm raised the Atlanta, GA-based electric company's price target to $62 from $59.
The upgrades come as "opportunities outweigh risks at this point in time," according to the analyst note. These potential catalysts stem from Southern Power, Southern Company Gas, and, recently, a "strategic venture" with Kinder Morgan (KMP).
Current risks include the uneasiness that comes from mergers and acquisitions, as well as recent concerns about two subsidiaries: Kemper Project and the Vogtle Electric Generating Plant, the firm said.
As Southern works toward completing the acquisition of AGL Resources (GAS), while continually expanding Southern Power, the firm says the company is becoming "an infrastructure story."
"Combine this with the recently announced strategic venture for natural gas pipelines and there is a solid infrastructure thesis driving earnings growth, while maintaining the risk profile of a regulated utility," Barclays noted.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate SOUTHERN CO as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its expanding profit margins, solid stock price performance, notable return on equity and reasonable valuation levels. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
You can view the full analysis from the report here: SO
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