UBS downgraded Southern Company to Neutral from Buy with a price target of $76, down from $78. The stock trades at an 11% premium vs. peers, which prices in the 7% annual EPS growth for 2023-2028 and top tier regulation, the analyst tells investors in a research note. While Georgia Power is projecting a material increase in sales growth to 9% annually 2025-2028, UBS sees rate base growth of 6% as the limiting factor for the EPS trajectory. The firm thinks the current valuation is warranted given the supportive regulatory backdrop, healthy balance sheet and earnings growth, but sees more limited upside at the current price.
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