Mizuho Downgrades Southern Outlook Amidst Revenue Growth

A recent report reveals that Mizuho has downgraded Southern's stock outlook from Outperform to Neutral, suggesting a projected price decrease of 2.03%. Despite this, Southern is expected to see a revenue growth of 6.72%, along with a projected EPS of 4.15.

Date: 17-09-2024

AI Rating: 5

The report highlights a downgrade of Southern's stock outlook from Outperform to Neutral by Mizuho. This change in outlook is significant as it can impact investor sentiment and potentially lead to a decline in the stock price. The average one-year price target for Southern is set at 88.03 GBX/share, indicating a 2.03% downside from its latest closing price of 89.86 GBX/share. This forecast can make investors cautious and could lead to selling pressure.

However, the report also mentions that the projected annual revenue for Southern is 27,890MM, marking a healthy increase of 6.72%. This positive revenue growth may help offset concerns raised by the downgrade and could encourage some investors to hold or even purchase more shares, viewing it as a long-term growth opportunity.

Furthermore, the projected annual non-GAAP EPS is reported at 4.15, which can reflect the company's ability to generate earnings relative to its share count, further appealing to income-focused investors.

In terms of institutional sentiment, there has been an increase in the number of funds reporting positions in Southern, with a 3.82% rise in the last quarter. This indicates ongoing interest from institutional investors, showing confidence despite the downgrade. Notably, J.P. Morgan Chase has increased its holdings by 24.43%, suggesting that some major players are still bullish on Southern’s prospects.

Overall, while Mizuho's downgrade and negative price forecast present a bearish sentiment, the revenue growth and EPS projections, combined with institutional buying, provide a more complex picture. Investors may need to weigh these factors carefully when making decisions regarding Southern's stock.

Stocks: LSE:0L8A