SOMN
The Southern Company
$48.96
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 21.9% below fair value
You pay
$48.96
Bear
$54.88
Fair
$62.72
Bull
$70.56
Bear
$54.88
+12.1%
$3.92 × 14x P/E
Fair
$62.72
+28.1%
$3.92 × 16x P/E
Bull
$70.56
+44.1%
$3.92 × 18x P/E
Adjust Assumptions
16.0x
3.92$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
12.5x
Summary
Applying a 16x P/E to adjusted EPS of $3.92, the base-case value is $62.72 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