Southern Co. ( NYSE: SO ) +1.2% in Thursday's trading as UBS upgraded shares to Buy from Neutral with an $87 price target, raised from $76, saying the company's "post-Vogtle growth profile should accelerate on fleet transformation opportunities to achieve [its] 2050 net zero carbon emissions goal."
UBS analyst Ross Fowler believes the "Vogtle risk premium in shares should wane and the market should begin to apply historical premiums to Southern prior to new nuclear construction issues for first quartile regulation," noting the stock had traded at an average 17% premium to the average regulated utility prior to new nuclear construction.
Fowler expects both Vogtle units moving to an in-service rate base will generate cash of $600M-$700M.
On Wednesday, the Nuclear Regulatory Commission approved the loading of radioactive fuel and beginning operation of one of two new reactors at the Voglte 3 nuclear plant .
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Southern Co. upgraded to Buy at UBS after NRC approved Vogtle Unit 3