American Electric initiated with an Overweight at Barclays

Barclays initiated coverage of American Electric with an Overweight rating and $88 price target. The analyst initiated coverage of 26 stocks within the U.S. power and utilities sector with a Neutral industry view. The firm takes a selective stance in stock picking across the sector, balancing “underwhelming” year-to-date performance from both stock prices and company results, sharp increases in retail rates, higher regulatory scrutiny, and elevated interest rates against waning commodity pressures, potential credit improvement, and substantial new capital opportunities driven by the Inflation Reduction Act. Barclays thinks it is “too soon to be bullish on the group,” with its stock preferences geared toward the names with low rate offerings relative to median household incomes. It likes companies with limited rate case risk to achieve earnings objectives over the next year, improving balance sheets, and constructive regulatory backdrops.