Morgan Stanley Hikes Southern Company Price Target to $91, Keeps Underweight Rating
Morgan Stanley maintained an Underweight rating on The Southern Company while raising its 12-month price target to $91 from $85. Southern Company expanded its 2026–2030 capital plan by 7% to $81 billion, allocating half to power generation and forecasting 2026 adjusted EPS of $4.50–$4.60.
1. Morgan Stanley Rating and Price Target
On February 20, Morgan Stanley analyst David Arcaro maintained an Underweight rating on The Southern Company while raising the 12-month price target to $91 from $85, reflecting cautious outlook despite modest value revision.
2. Five-Year Capital Plan Raised by 7%
Southern Company increased its 2026–2030 capital plan by 7% to $81 billion from $76 billion, directing roughly half toward power generation, signing 10 gigawatts of large-load customer deals and fielding interest for about 75 gigawatts of grid connections.
3. 2026 Adjusted EPS Guidance
The company forecasts 2026 adjusted EPS of $4.50 to $4.60, with a midpoint of $4.55 slightly below the $4.56 street estimate, signaling modest earnings headwinds.
4. Utility Sector Trends
Morgan Stanley updated its price forecasts for North American regulated utilities and IPPs, noting that utilities lagged the S&P 500 in January and weighing data center pipeline growth against affordability and political considerations.