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Goldman Sachs Discusses Southern Company Acquisition Activity, Reinstates Coverage

Goldman Sachs Discusses Southern Company Acquisition Activity, Reinstates Coverage - Southern Company The NYSE:SO

Southern CoSO first received approval for the merger with AGL Resources on March 22; the merger was completed July 1, 2016, for about $8 billion. Goldman Sachs had a Not Rated designation from Southern Company during the merger.

Goldman's Reinstated Neutral Rating

Goldman Sachs' Michael Lapides reinstated Southern Co. at Neutral with a price target of "$54sh." The analyst emerged 5 percent above street consensus on 2017/2018 EPS, estimating $2.88 and $2.90 respectively.

Regulatory Risk

Among Lapides greatest concerns is regulatory risk. "Regulatory risk remains heightened given (1) ongoing investigations into the Kemper County clean coal project and a major rate case next year for this project and (2) regulatory approvals for potential incremental nuclear construction costs at the Vogtle site," stated the analyst.

At time of writing, Southern Co traded at $53.01, down 0.23 percent in Thursday's pre-market session.

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DateFirmActionFromTo
Jul 2016Goldman SachsReinstatesNeutral
Jul 2016BarclaysUpgradesEqual-weightOverweight
May 2016Scotia Howard WielInitiates Coverage onSector Perform

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