In a report released today, James Thalacker from BMO Capital downgraded American Electric Power to a Hold, with a price target of $126.00.
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James Thalacker has given his Hold rating due to a combination of factors influencing American Electric Power’s current market position and future prospects. The company has made significant strides in repositioning itself to capitalize on the growing demand for power, which has led to a positive re-rating of its shares. However, the potential for further expansion in valuation is largely contingent on successful execution, which may take time to materialize. As a result, Thalacker has opted to maintain a cautious stance with an unchanged target price.
Despite the company’s recent capital plan update and increased long-term growth expectations, which have exceeded initial forecasts, the Hold rating reflects a balanced view of the opportunities and risks. The ambitious $72 billion capital plan and anticipated improvements in return on equity suggest a promising growth trajectory. However, the substantial equity issuance required to support this growth, along with the back-end weighted financing plan, introduces a level of uncertainty. Therefore, Thalacker’s Hold rating acknowledges both the potential for growth and the challenges that lie ahead.
In another report released on October 16, Jefferies also reiterated a Hold rating on the stock with a $128.00 price target.