It's been a good week for The Southern Company (NYSE:SO) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.6% to US$75.85. It looks like a credible result overall - although revenues of US$6.6b were in line with what the analysts predicted, Southern surprised by delivering a statutory profit of US$1.03 per share, a notable 14% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Southern

Following the latest results, Southern's 15 analysts are now forecasting revenues of US$27.0b in 2024. This would be a credible 6.0% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$3.88, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$27.0b and earnings per share (EPS) of US$3.99 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$75.42, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Southern at US$85.00 per share, while the most bearish prices it at US$66.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Southern's growth to accelerate, with the forecast 8.1% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Southern to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$75.42, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Southern going out to 2026, and you can see them free on our platform here.

Even so, be aware that Southern is showing 3 warning signs in our investment analysis , and 1 of those is potentially serious...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.