HScreen

rendered 2026-08-28 20:16 UTC STALE inputs (227h)

SO · The Southern Company 9d old

conviction2
coverage tierT3-PRIMARY-COMPLETE
horizon12 months

Return distribution probability-weighted scenarios, never collapsed to a point

-9.0%28%
+10.5%50%
+23.0%22%
EV +7.79%
why these probabilities: All three legs built forward from FY2025 reported EPS of USD 3.94 and a price of USD 92.40 (2026-08-18), and all three are total return including the USD 3.04 forward dividend (3.29% yield). Entry multiple is 21.9x FY2026E EPS of ~4.21. BASE = what the market expects, delivered. Consensus (fmp:/stable/analyst-estimates? symbol=SO&period=annual, as_of 2026-08-19, 34 covering analysts) has revenue growth 7.7% (FY26) and 5.5% (FY27) with EPS growth 6.8% (FY26) and 7.5% (FY27). Roll FY27 EPS to ~4.53 and hold the multiple flat at 21.9x → 99.2, +7.4% price +3.3% dividend = +10.5%. This is anchored TO consensus deliberately: we have no model, no management access and no channel checks, and the resulting number sits within 1pp of the street's own implied +11.3% (target 99.83 plus yield), which is the correct outcome for a descriptive base leg. BULL = materially faster growth than the market expects. FY27 EPS growth of ~9.5% rather than consensus 7.5% → EPS ~4.61, on the named evidence that legacy wholesale capacity is recontracting at 2-3x current rates as contracts roll (SO/SO_2025Q4.json:48) and that the 17 GW large-load book is still being added to (SO/SO_2026Q2.json:4), with management saying the 7-8% CAGR is strengthened and lengthened and that they see potential to be higher than the guided range. On that trajectory the multiple re-rates from 21.9x to ~24x — the level the market
not built — options-implied distribution on the same axis, with the KL number and where the disagreement sits
needs: desk-options implied bands (v1.4 Part 4a) — activates at 60% coverage; currently 33%

Visibility how far ahead this name can be seen

not built — visibility score
needs: visibility_score.py

Trust how much weight this name's own record can carry (credibility Z)

not built — credibility
needs: credibility.py

Sizing survival-first size (half-Kelly) vs the enforced ladder

kelly not computable — no data

Payout durability does the distribution survive a downturn?

FAIL
DPS trajectoryprogressive
interest cover now2.2x
interest cover at FORWARD rates2.11x
interest coverage now 2.2x < 3.0x; FCF <= 0: payout ratio undefined; treat as failing

Falsifiers what would prove this wrong

Management reaffirms the 7-8% long-term EPS CAGR at or near the top end, with the large-load pipeline still being added to
The contracted large-load book stays at or above ~17 GW by the mid-2030s and is not reduced by cancellation or contract renegotiation
Residual equity or equity-equivalent need stays at approximately USD 2bn through 2030, with no incremental issuance beyond the disclosed ATM forwards and mandatory convertible
Georgia PSC and Alabama regulatory outcomes remain constructive — no adverse rate order, no disallowance of large-load capex, and RFP proposals proceed to certification
The dividend is increased for a 26th consecutive year at the April 2027 board action, keeping the 79-year record intact and the payout walking toward the low 60s
Wholesale capacity recontracting is realised at a materially higher rate than legacy, in the region of the 2-3x management has described in the market

Conflicts surfaced, never netted out (T4)


Our probability-weighted expected total return is +7.8% against the street's implied +11.33% (consensus target 99.83 plus 3.29% yield). We are 3.5pp LESS constructive than the street mark, while agreeing with the street
medium

The revision tape is UNAVAILABLE, not flat-by-agreement: estimates_query eps_drift and rev_drift both return n_up 0, n_down 0, breadth 0.0, median_move null, and the universe row for SO shows estimate_rows 0. So the cons
high

Both options_implied anchors are null — no chain entry for SO in desk_options.json. The pack itself states the strongest available anchor for a dated market view on exactly this question is missing, so the probability ve
high

Quality 7 and growth 6 against valuation 4: the evidence that makes this a defensible franchise with credible load growth is the same evidence the market has already priced at 21.9x FY26E. The conflict is internal and de
medium

The rating distribution is 21 Hold, 10 Buy, 3 Sell — a Hold consensus — yet the aggregate target of 99.83 implies +8% price upside and the target range is 79-112, a 42% spread on a regulated utility. Those two are not co
medium

The case against independent adversary, different model family (P6) weakened

Version history from the research record

archived versions1
archivedhashbytes
2026-08-19T08:32:014f4a571b7cdd37,881
One version only — the archive was created today. The diff view fills in on the next re-run.
Rendered from canonical artifacts only (T1) — no terminal database exists. Every figure is read from the system's own files at render time; where an artifact is missing the panel names the dependency rather than showing an empty box. No execution path exists anywhere in this interface (T5), not even a link.