← Back

Southern: Southern Company: Robust Growth and Investment Plans Unveiled

Southern Company's 2025 adjusted earnings per share (EPS) reached $4.30, at the top of their guidance range, representing 6% growth from the prior year and 9% average annual growth from 2023. The company's weather-normalized total retail electricity sales growth was 1.7% in 2025, more than double the cumulative growth of the last decade. Notably, Georgia Power's sales grew 2.5%, driven by strong commercial sales, particularly from data center customers, which were up 17% year-over-year. The actual EPS for the quarter came out at $0.55, slightly below estimates of $0.558.

SO

USD 94.3

-0.79%

A-Score: 6.7/10

Publication date: February 19, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • 2025 Adjusted EPS Growth: Reached $4.30, top of guidance, 6% YoY growth and 9% CAGR since 2023.
  • Retail Electricity Sales Growth: Weather-normalized sales up 1.7% in 2025 (double decade’s average), Georgia Power’s commercial sales rose 17% YoY due to data centers.
  • Capital Investment Expansion: $81 billion 5-year plan (30% higher than prior forecast), $42 billion allocated for generation, transmission, and pipeline upgrades.
  • Projected Earnings Growth: 8-9% CAGR in 2026–2028 (guidance: $4.85–$5.45 by 2028), 8% average annual growth from 2026–2030.
  • Data Center Demand Impact: 13 GW of Georgia contracts secured, potential recontracting at $20–25/kW-month, driving rate stability through 2027–2028.

Financial Performance and Guidance

The company's financial performance was strong, with adjusted EPS growth driven by increasing demand, particularly from data center customers. For 2026, the guidance range is $4.50 to $4.60 per share, representing 7% growth from the top and bottom of the 2025 adjusted EPS guidance range. Analysts estimate next year's revenue growth at 4.8%. The company's long-term growth prospects are supported by its robust capital investment plan, with a base capital investment forecast of $81 billion over the next 5 years.

Capital Investment and Growth Prospects

Southern Company's capital investment plan is expected to drive long-term growth, with a focus on new generation, enhancements to existing generation assets, and expansions of their transmission and interstate pipeline systems. The company has a robust pipeline of large load customers, with over 75 gigawatts of potential load, and 26 signed contracts representing 10 gigawatts of fully contracted electric service agreements. The company projects retail electric sales to grow at least 3% in 2026 and 10% on average from 2026 through 2030.

Valuation and Dividend Yield

With a P/E Ratio of 23.96 and a Dividend Yield of 3.14%, Southern Company's valuation appears reasonable, considering its growth prospects. The company's ROE is 12.5%, and its ROIC is 4.55%. The Net Debt / EBITDA ratio is 4.83, indicating a manageable debt burden. As the company continues to invest in its capital investment plan, its growth prospects are expected to drive long-term shareholder value.

Growth Drivers and Risks

The growth in data centers is a key driver of Southern Company's growth prospects, with a growing pipeline of projects and a strong outlook for the future. However, the company notes that there may be a pivot in the near term, with possible deferrals of initial energization dates or restructuring of ramp profiles. Minimum bill protections in contracts may insulate earnings from fluctuations. The company's disciplined risk profile and focus on rate stability are expected to support its long-term growth prospects.

Southern's A-Score