What changed
$SO — Generates electricity and sells natural gas.
🎯 Q1 FY26 | Rev $8B | EPS $1.32 vs $1.21 🟢 | Margin 24.0%
💡 Consensus expects steady regulated utility growth. The 8.9% EPS beat is largely due to accelerated depreciation benefits ($335M remaining in 2026) and lower tax expense, not sustainable operational improvement. Market may be pricing in continued beats, but core earnings growth is modest.
🏢 Business Quality: 7/10 | Valuation: fair
📉 Reward/Risk: upside 5% to $99 (target P/E 21.5x on FY26 EPS $4.57) vs downside 10% to $85 (P/E 18.5x if core earnings disappoint). Ratio 0.5:1.
🔮 Catalyst: Q2 2026 earnings (late July 2026): EPS vs estimate of $1.67. Key metric: operating cash flow minus capex (FCF). Failure signal: FCF remains deeply negative or guidance cut.
💰 Entry: Current price $94.23 is near 52-week highs.
Also in play: $H $CLF $X $NUE $STLD $RIO