American Electric price target lowered to $88 from $94 at BMO Capital

BMO Capital lowered the firm’s price target on American Electric to $88 from $94 and keeps an Outperform rating on the shares. The firm is citing the KYPSC final order in the company’s KPCo rate case, stating that although the commission largely adopted the provisions of the November 20 settlement agreement, the stipulated revenue requirement was lowered $14M due to ongoing concerns of management related to transmission cost allocation to KPCo customers. BMO adds however that given its improving credit profile, manageable equity needs, and improving regulated ROE profile, American Electric is “one of the more attractive relative value opportunities” in its coverage universe.