Southern Company price target raised to $87 from $78 at KeyBanc

KeyBanc raised the firm’s price target on Southern Company (SO) to $87 from $78 and keeps an Underweight rating on the shares. The firm notes that Southern Company, trading at about 12% premium to the group, is one of the most expensive names on a relative basis. While this premium is justified by the company’s superior regulatory construct in its territories, particularly in GA, KeyBanc believes the recent three-year stay-out and the lack of new rates in its biggest jurisdiction will make it challenging for Southern to re-base/guide higher for its EPS growth rate, especially given its aggressive capital investment program in GA in the near-term. As a result, the firm believes that the company’s growth opportunities are more limited than the market is giving the stock credit for, and that growth rate revisions are unlikely in the near term.