SOMN
The Southern Company
$51.68
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 18.1% below fair value
You pay
$51.68
Bear
$55.20
Fair
$63.08
Bull
$70.97
Bear
$55.20
+6.8%
$3.94 × 14x P/E
Fair
$63.08
+22.1%
$3.94 × 16x P/E
Bull
$70.97
+37.3%
$3.94 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
13.1x
Summary
Applying a 16x P/E to adjusted EPS of $3.94, the base-case value is $63.08 per share.
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