The Southern Company

UtilitiesRegulated ElectricNYSE

$92.43

Market Cap: $104.20B

The Southern Company (SO) Valuation Summary

Updated May 11, 2026 02:31

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$78.75 – $1,203.36	$181.53	+96.4%
Growth Exit 10Y	$90.37 – $1,232.86	$195.84	+111.9%
EBITDA Exit 5Y	$130.57 – $321.10	$217.82	+135.7%
EBITDA Exit 10Y	$135.15 – $363.72	$232.37	+151.4%
▸ Trading Multiples
P/E	$76.50 – $111.71	$88.09	-4.7%
EV/EBITDA	$108.31 – $171.57	$114.68	+24.1%
EV/Revenue	$89.90 – $110.87	$95.62	+3.5%
▸ PEG
PEG Fair Value	$56.89 – $56.89	$56.89	-38.5%
▸ Earnings Power Value
Earnings Power Value	$11.64 – $56.30	$28.54	-69.1%
▸ Dividend Discount
Dividend Discount	$40.08 – $113.90	$61.58	-33.4%

Valuation History

DCF Analysis

Fair Value

$181.53

Market Price

$92.43

Upside / Downside

+96.4%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Southern Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.3% to 4.2% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 52, DPO 75, DIO 72). At a 6.2% WACC with mid-year discounting, the terminal value (85% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $181.53 per share, suggesting SO is undervalued by 96.4% at the current price of $92.43.

FCFF Present Value Calculation

WACC

6.17%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	8,369	8,810	9,361	9,880	10,291	10,548
(−) Net Interest	2,836	2,985	3,172	3,347	3,487	3,574
(+) D&A	9,321	10,009	10,673	11,244	11,974	12,274
EBITDA	20,526	21,805	23,206	24,470	25,752	26,396

(−) Tax	1,267	1,334	1,417	1,496	1,558	1,597
(−) CapEx	10,681	11,244	11,947	12,608	13,133	13,462
(−) ΔWC	551	224	279	263	209	214
Free Cash Flow (FCFF)	8,027	9,003	9,563	10,104	10,852	11,123

Terminal Value						303,183
WACC / Discount Rate	6.2%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	7,790	8,230	8,234	8,194	8,289	224,761

Enterprise Value	265,498
Projection Period	40,737	15.3%
Terminal Value	224,761	84.7%

(−) Current Net Debt	64,179

Equity Value	201,319
(/) Outstanding Shares	1,109

Fair Price	$181.53

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.2%	$287	$358	$471	$680	$1203
5.2%	$192	$226	$272	$339	$447
6.2%	$138	$157	$182	$214	$257
7.2%	$103	$115	$130	$148	$171
8.2%	$79	$87	$97	$108	$122

Current price: $92.43. Green = undervalued, Red = overvalued.

Fair Value

$195.84

Market Price

$92.43

Upside / Downside

+111.9%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Southern Company's cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 4.3% to 3.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 52, DPO 75, DIO 72). At a 6.2% WACC with mid-year discounting, the terminal value (72% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $195.84 per share, suggesting SO is undervalued by 111.9% at the current price of $92.43.

FCFF Present Value Calculation

WACC

6.17%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	8,369	8,810	9,361	9,880	10,291	10,886	11,455	11,990	12,483	12,927	13,250
(−) Net Interest	2,836	2,985	3,172	3,347	3,487	3,688	3,881	4,062	4,229	4,379	4,489
(+) D&A	9,321	10,009	10,673	11,244	11,974	11,922	12,565	13,240	13,911	14,575	14,939
EBITDA	20,526	21,805	23,206	24,470	25,752	26,497	27,900	29,291	30,622	31,881	32,678

(−) Tax	1,267	1,334	1,417	1,496	1,558	1,648	1,734	1,815	1,890	1,957	2,006
(−) CapEx	10,681	11,244	11,947	12,608	13,133	13,892	14,618	15,301	15,930	16,497	16,909
(−) ΔWC	551	224	279	263	209	302	288	271	250	225	231
Free Cash Flow (FCFF)	8,027	9,003	9,563	10,104	10,852	10,654	11,259	11,904	12,552	13,202	13,532

Terminal Value											368,851
WACC / Discount Rate	6.2%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	7,790	8,230	8,234	8,194	8,289	7,666	7,630	7,598	7,547	7,476	202,713

Enterprise Value	281,367
Projection Period	78,654	28.0%
Terminal Value	202,713	72.0%

(−) Current Net Debt	64,179

Equity Value	217,188
(/) Outstanding Shares	1,109

Fair Price	$195.84

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
4.2%	$324	$394	$506	$714	$1233
5.2%	$217	$249	$293	$356	$458
6.2%	$157	$174	$196	$225	$264
7.2%	$118	$128	$141	$156	$176
8.2%	$90	$97	$105	$115	$126

Current price: $92.43. Green = undervalued, Red = overvalued.

Fair Value

$217.77

Market Price

$92.43

Upside / Downside

+135.6%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Southern Company's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.3% to 4.2% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 52, DPO 75, DIO 72). At a 6.2% WACC with mid-year discounting, the terminal value (87% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $217.82 per share, suggesting SO is undervalued by 135.7% at the current price of $92.43.

FCFF Present Value Calculation

WACC

6.17%

3% – 20%

EV/EBITDA Exit Multiple

13.54x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	8,369	8,810	9,361	9,880	10,291	10,548
(−) Net Interest	2,836	2,985	3,172	3,347	3,487	3,574
(+) D&A	9,321	10,009	10,673	11,244	11,974	12,274
EBITDA	20,526	21,805	23,206	24,470	25,752	26,396

(−) Tax	1,267	1,334	1,417	1,496	1,558	—
(−) CapEx	10,681	11,244	11,947	12,608	13,133	—
(−) ΔWC	551	224	279	263	209	—
Free Cash Flow (FCF)	8,027	9,003	9,563	10,104	10,852	—

Peers' EBITDA Multiple						13.5x
Terminal Value						357,397
WACC / Discount Rate	6.17%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	7,790	8,230	8,234	8,194	8,289	264,952

Enterprise Value	305,689
Projection Period	40,737	13.3%
Terminal Value	264,952	86.7%

(−) Current Net Debt	64,179
Equity Value	241,510
(÷) Outstanding Shares	1109M
Fair Price	$218	+135.6%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.5x	11.5x	13.5x	15.5x	17.5x
4.2%	$166	$205	$243	$282	$321
5.2%	$156	$193	$230	$267	$304
6.2%	$147	$183	$218	$253	$288
7.2%	$139	$172	$206	$240	$273
8.2%	$131	$163	$195	$227	$259

Current price: $92.43. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$232.32

Market Price

$92.43

Upside / Downside

+151.3%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project The Southern Company's cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 4.3% to 3.6% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 52, DPO 75, DIO 72). At a 6.2% WACC with mid-year discounting, the terminal value (76% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.5x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $232.37 per share, suggesting SO is undervalued by 151.4% at the current price of $92.43.

FCFF Present Value Calculation

WACC

6.17%

3% – 20%

EV/EBITDA Exit Multiple

13.54x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	8,369	8,810	9,361	9,880	10,291	10,886	11,455	11,990	12,483	12,927	13,250
(−) Net Interest	2,836	2,985	3,172	3,347	3,487	3,688	3,881	4,062	4,229	4,379	4,489
(+) D&A	9,321	10,009	10,673	11,244	11,974	11,922	12,565	13,240	13,911	14,575	14,939
EBITDA	20,526	21,805	23,206	24,470	25,752	26,497	27,900	29,291	30,622	31,881	32,678

(−) Tax	1,267	1,334	1,417	1,496	1,558	1,648	1,734	1,815	1,890	1,957	—
(−) CapEx	10,681	11,244	11,947	12,608	13,133	13,892	14,618	15,301	15,930	16,497	—
(−) ΔWC	551	224	279	263	209	302	288	271	250	225	—
Free Cash Flow (FCF)	8,027	9,003	9,563	10,104	10,852	10,654	11,259	11,904	12,552	13,202	—

Peers' EBITDA Multiple											13.5x
Terminal Value											442,462
WACC / Discount Rate	6.17%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	7,790	8,230	8,234	8,194	8,289	7,666	7,630	7,598	7,547	7,476	243,168

Enterprise Value	321,822
Projection Period	78,654	24.4%
Terminal Value	243,168	75.6%

(−) Current Net Debt	64,179
Equity Value	257,643
(÷) Outstanding Shares	1109M
Fair Price	$232	+151.3%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.5x	11.5x	13.5x	15.5x	17.5x
4.2%	$207	$246	$285	$325	$364
5.2%	$186	$222	$258	$293	$329
6.2%	$168	$200	$232	$265	$297
7.2%	$151	$180	$210	$239	$269
8.2%	$135	$162	$189	$216	$243

Current price: $92.43. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$88.09

Market Price

$92.43

Upside / Downside

-4.7%

Verdict

Overvalued

Using the industry peer median P/E Multiples multiple (trailing + forward), The Southern Company (SO) has a fair value of $88.09 based on 8 comparable companies in the Regulated Electric industry.

P/E Valuation — Regulated Electric

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
The Southern CompanySO	102,505	23.6x	20.2x
NextEra Energy, Inc.NEE	194,145	28.3x	23.0x
Duke Energy CorporationDUK	96,802	19.7x	18.5x
Constellation Energy CorporationCEG	94,821	41.0x	26.1x
American Electric Power Company, Inc.AEP	70,821	19.5x	20.5x
Dominion Energy, Inc.D	54,425	17.9x	17.2x
Entergy CorporationETR	51,089	28.5x	25.4x
Xcel Energy Inc.XEL	50,210	23.5x	19.6x
Exelon CorporationEXC	44,929	16.0x	15.4x
Industry Median		21.6x	20.0x
(*) Profit after tax		4,341	5,074
Equity Value		93,757	101,618
(/) Outstanding shares		1,109	1,109
Fair Price		$85	$92

Selected Fair Value (avg of trailing + forward)

$88.09

-4.7%

Fair Value

$114.68

Market Price

$92.43

Upside / Downside

+24.1%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), The Southern Company (SO) has a fair value of $114.68 based on 8 comparable companies in the Regulated Electric industry.

EV/EBITDA Valuation — Regulated Electric

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
The Southern CompanySO	102,505	11.6x	11.1x
NextEra Energy, Inc.NEE	194,145	17.8x	15.8x
Duke Energy CorporationDUK	96,802	12.0x	11.6x
Constellation Energy CorporationCEG	94,821	20.0x	16.6x
American Electric Power Company, Inc.AEP	70,821	13.7x	12.8x
Dominion Energy, Inc.D	54,425	12.9x	11.8x
Entergy CorporationETR	51,089	13.3x	12.4x
Xcel Energy Inc.XEL	50,210	14.0x	12.9x
Exelon CorporationEXC	44,929	10.7x	10.3x
Industry Median		13.5x	12.6x
(*) EBITDA		14,334	14,953
= Enterprise Value		194,124	188,586
(-) Net Debt		64,179	64,179
Equity Value		129,945	124,407
(/) Outstanding shares		1,109	1,109
Fair Price		$117	$112

Selected Fair Value (avg of trailing + forward)

$114.68

+24.1%

Fair Value

$95.62

Market Price

$92.43

Upside / Downside

+3.5%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), The Southern Company (SO) has a fair value of $95.62 based on 8 comparable companies in the Regulated Electric industry.

EV/Revenue Valuation — Regulated Electric

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
The Southern CompanySO	102,505	5.6x	5.4x
NextEra Energy, Inc.NEE	194,145	10.4x	9.3x
Duke Energy CorporationDUK	96,802	5.8x	5.7x
Constellation Energy CorporationCEG	94,821	3.9x	3.3x
American Electric Power Company, Inc.AEP	70,821	5.5x	5.2x
Dominion Energy, Inc.D	54,425	6.2x	5.7x
Entergy CorporationETR	51,089	6.3x	5.9x
Xcel Energy Inc.XEL	50,210	5.8x	5.3x
Exelon CorporationEXC	44,929	3.9x	3.7x
Industry Median		5.8x	5.5x
(*) Revenue		29,553	30,829
= Enterprise Value		171,249	169,203
(-) Net Debt		64,179	64,179
Equity Value		107,070	105,024
(/) Outstanding shares		1,109	1,109
Fair Price		$97	$95

Selected Fair Value (avg of trailing + forward)

$95.62

+3.5%

PEG Fair Value

Fair Value

$56.89

Market Price

$92.43

Upside / Downside

-38.5%

Verdict

Overvalued

Using the PEG framework with analyst consensus forward EPS growth of 12.4% plus 2.9% dividend yield, the company has a fair value of $56.89 based on NTM EPS (FY2026) of $4.57. The current PEG ratio is 1.62.

PEG Ratio

1.62Pricey

01.02.03.0+

PEG = P/E ÷ (Growth + Yield) = 20.2 ÷ (9.5% + 2.9%) = 1.62

PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.

Growth Category: StalwartPEG highly applicable

PEG works well for steady growers with predictable earnings.

Fair Value Calculation

EPS Growth RateForward	9.5%
Dividend Yield	+2.9%
Adjusted Growth (clamped 8–25%)	12.4%
Fair P/E	12.4x
NTM EPS (FY2026)	$4.57
Fair Value	$56.89

Growth Analysis

Forward GrowthActive

Period	EPS Est.	Growth	Analysts
FY2025 (actual)	$3.92	—	—
FY2026E	$4.57	+16.7%	13
FY2027E	$4.93	+7.7%	14
FY2028E	$5.37	+9.0%	15
FY2029E	$5.77	+7.5%	11
FY2030E	$6.18	+7.1%	7

5Y Forward EPS CAGR: 9.5%

Historical Growth

Year	Net Income	EPS	YoY
FY2021	$2.4B	$2.26	—
FY2022	$3.5B	$3.26	+44.2%
FY2023	$4.0B	$3.62	+11.0%
FY2024	$4.4B	$3.99	+10.2%
FY2025	$4.3B	$3.92	-1.8%

4Y Historical EPS CAGR: 14.8%

Earnings Power Value

Fair Value

$28.54

Market Price

$92.43

Upside / Downside

-69.1%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 6.2% and normalized earnings of $5.9B, the company has a fair value of $28.54 per share. The EPV range is $11.64 – $56.30 based on WACC sensitivity (4.7% – 7.7%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	5,912	5,912	5,912
(/) WACC	7.7%	6.2%	4.7%
Enterprise Value	77,086	95,830	126,619
(-) Net debt	64,179	64,179	64,179
Equity Value	12,907	31,651	62,440
(/) Outstanding shares	1,109	1,109	1,109
Fair Price	$11.64	$28.54	$56.30

Dividend Discount Model

Fair Value

$61.58

Market Price

$92.43

Upside / Downside

-33.4%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 7.4% and projected dividend growth of 4.4%, the fair value is $61.58 per share. The DDM range is $40.08 – $113.90 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$2.72

Dividend Yield

2.89%

Payout Ratio

69.5%

Dividend Coverage

1.44x

DPS CAGR (4Y)1.0%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$2.72	69.5%	+1.5%
2024	$2.68	67.1%	-3.1%
2023	$2.76	76.3%	+2.8%
2022	$2.69	82.2%	+2.7%
2021	$2.62	115.3%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$2.84	4.4%	0.9309	$2.64
2027	$2.96	4.4%	0.8666	$2.57
2028	$3.09	4.4%	0.8068	$2.49
2029	$3.23	4.4%	0.7511	$2.42
2030	$3.37	4.4%	0.6992	$2.36
Terminal Value	$3.45 DPS	2.5%		$49.09

PV of Projected Dividends$12.48

PV of Terminal Value$49.09

Fair Value per Share$61.58

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	2.4%	3.4%	4.4%	5.4%	6.4%
5.4%	$95	$99	$104	$109	$114
6.4%	$71	$74	$77	$81	$85
7.4%	$56	$59	$62	$64	$67
8.4%	$47	$49	$51	$53	$56
9.4%	$40	$42	$44	$46	$48

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.