Analyst: Southern Company’s Efforts To Grow Electric Supply Causing Stock Volatility
The stock price of Atlanta-based Southern Company is at $44 per share, down from a high earlier this year of $52. One analyst says the stock will continue to be volatile as the company grows its electric supply.
Southern Company’s most significant project is undoubtedly at Plant Vogtle near Augusta, where it’s building two new nuclear reactors. The project has been plagued by cost overruns and multiple-year delays.
“Particularly when you have a company in the middle of a big generation investment…that creates uncertainty and therefore volatility for the stock price and that’s basically where Southern is at,” says Dave Parker, a senior analyst for Robert W. Baird & Co.
Parker expects Southern to continue to underperform compared to other utilities, at least in the short-term.
“For the last 12 months, the stock is down almost one percent and its peers – the other highly regulated electric utilities – are up about 12 percent so that really helps identify the issue,” says Parker.
He says he’ll reassess his outlook at the end of the summer when federal regulators decide whether to modify proposed new carbon regulations. That could help Southern because of their ongoing investment in nuclear, which emits no carbon.
A Southern spokesman emailed a brief statement, saying its “stock performance is influenced by many factors.”
The company is set to report its first quarter earnings April 29.
9(MDAxODM0MDY4MDEyMTY4NDA3MzI3YjkzMw004))
Related
Top Stories
