Southern Company Stock: Conflicting Cues from Analysts and Major Investors

Shares of Southern Company find themselves at a crossroads, caught between a fresh analyst downgrade and a monumental vote of confidence from one of the world's most significant sovereign wealth funds. Recent data reveals that Norway's Norges Bank has established a new position valued at approximately $1.18 billion, a move that starkly contrasts with selling activity from other institutional players.

The latest regulatory filings, published on Sunday, paint a picture of significant rotation among major shareholders. While Federated Hermes Inc. reduced its stake by 23.1% in the second quarter, selling 702,697 shares to hold about 2.34 million shares worth $215.2 million, this outflow was more than offset by substantial purchases elsewhere. Alongside Norges Bank's billion-dollar entry, Vanguard significantly increased its holdings to 105.9 million shares, now valued at roughly $9.73 billion. Collectively, institutional investors control 64.10% of the company's shares.

This buying support, however, is juxtaposed against technical and analytical pressure. The research firm Wall Street Zen downgraded the stock from "Hold" to "Sell" on Saturday. This negative call aligns with the current technical posture: at the last closing price of $86.25, the stock trades below both its 50-day moving average of $93.15 and its 200-day moving average of $92.45, signaling a medium-term downtrend.

Dividend Details and Fundamental Forecasts

Shareholders of record as of November 17 will receive the quarterly dividend of $0.74 per share on Monday, December 8. This payout annualizes to $2.96, representing a current yield of about 3.43%.

Should investors sell immediately? Or is it worth buying Southern?

The downgrade stands in contrast to the underlying business performance. For the third quarter, reported on October 29, Southern posted earnings per share (EPS) of $1.60, surpassing expectations, even as revenue of $7.82 billion fell short of forecasts. Looking ahead to the 2025 fiscal year, analysts project revenue growth of 9.72% to $29.32 billion and EPS growth of 10.62% to $4.41.

While Wall Street Zen advocates selling, the broader analyst consensus remains at "Hold." The average price target from 16 analysts sits at $98.22, implying an upside potential of roughly 13.8% from current levels. Targets range from $87.00 to $107.00.

Market participants will watch to see whether the "Sell" rating or the impending dividend payment dominates trading activity on Monday. A key hurdle for bullish momentum remains a recovery above the 200-day moving average at $92.45. Nevertheless, the massive capital commitment from Norges Bank suggests major investors are identifying value at these lower price levels. With revenue projected to reach $30.72 billion by 2026, long-term institutional money appears to be positioning for future stability.