Southern Company: Data Center Load: De-Risked and Bounded

Research evidence excerpt

Southern Company: Data Center Load: De-Risked and Bounded

NORTH AMERICA | Power & Utilities

Southern Company EquityJuneResearch22, 2026

TARGET | ESTIMATE CHANGEData Center Load: De-Risked and Bounded

Signed Georgia Power large load contracts carry minimum bills above 100% RATING HOLD

of cost to serve with no volume at risk, moving the debate from investment PRICE $93.09^

recovery to how much of the economics shareholders keep through the July PRICE TARGET | % TO PT $99.00 ($103.00) | +6%

2028 base rate case. We model GP earned ROE at 10.0% to 10.8%, below 2026's 52W HIGH-LOW $100.84 - $83.80

filed ~11.3% and the 11.90% cap, so upside is real but bounded. The 2028 rate FLOAT (%) | ADV MM (USD) 100.6% | 583.40

case is the key variable. MARKET CAP $104.1B

TICKER SO

We stay HOLD, target $99.00, and frame the stock around the July 2028 Georgia base rate case ^Prior trading day's closing price unless otherwise noted.

with November election forming the Commission. Our 2028E P/E-driven PT moves to $99.00 from

$103 on a lower applied multiple, not lower estimates; our adjusted EPS path moves slightly higher

in the outer years, rising from an unchanged $4.55 (26E) to now $6.20 (30E), ~8% CAGR, lifted FY (Dec) CHANGE TO JEFe JEF vs CONS

~0.7% in 29E and ~0.6% in 30E on higher Georgia Power earned returns. The FY3 P/E premium 2026 2027 2026 2027

to regulated electric peers has compressed to ~4 to 5% from ~17 to 19% in mid-2025, against a EPS NA NA NM NM

~10.1% trailing average, coincident with the 2025 PSC election upsets and 2026 flip odds. DPS NA NA -1% -1%

The signed contracts have converted volumetric risk into allocation risk, which helps the

2026 ($) Q1 Q2 Q3 Q4 FY

downside more than the upside. Minimum bills are set at no less than 100% of incremental cost