SO
The Southern Company
$86.17
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 37.4% above fair value
You pay
$86.17
Bear
$54.88
Fair
$62.72
Bull
$70.56
Bear
$54.88
-36.3%
$3.92 × 14x P/E
Fair
$62.72
-27.2%
$3.92 × 16x P/E
Bull
$70.56
-18.1%
$3.92 × 18x P/E
Adjust Assumptions
16.0x
3.92$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
22.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (34 analysts)
$97.00
Divergence from AlphaVal
35%
Summary
Applying a 16x P/E to adjusted EPS of $3.92, the base-case value is $62.72 per share. DDM cross-check: $53.66.
Warnings
Wall Street's average price target is $97.00 (from 34 analysts). Our estimate is 35% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples