Story updated at 9:45 a.m. to reflect market activity.
Southern gained 0.1% to $44.22 in morning trading.
The firm set a price target of $40 for the company. UBS analysts cited the Kemper project, which continues to face delays, as a cause for the downgrade.
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Separately, TheStreet Ratings team rates SOUTHERN CO as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUTHERN CO (SO) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.3%. Since the same quarter one year prior, revenues rose by 19.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electric Utilities industry. The net income increased by 279.4% when compared to the same quarter one year prior, rising from $97.00 million to $368.00 million.
- SOUTHERN CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOUTHERN CO reported lower earnings of $1.87 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($2.77 versus $1.87).
- SO has underperformed the S&P 500 Index, declining 5.48% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
- The gross profit margin for SOUTHERN CO is currently lower than what is desirable, coming in at 33.96%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.92% trails that of the industry average.
- You can view the full analysis from the report here: SO Ratings Report