American Electric Power (AEP) AI Stock Analysis

• Market Cap: $62.03B
• Dividend Yield: 3.2%
• Average Volume (3M): 3.29M
• Price to Earnings (P/E): 17.0
• Beta (1Y): <0.01
• Revenue Growth: 5.84%
• EPS Growth: 36.33%
• Country: US
• Employees: 16,330
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 1.43
• Shares Outstanding: 534,794,740
• 10 Day Avg. Volume: 2,878,962
• 30 Day Avg. Volume: 3,289,215
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.66
• Enterprise Value/Revenue: 4.92
• Enterprise Value/Gross Profit: 14.80
• Enterprise Value/Ebitda: 11.57
• 1Y Price Target: $122.23
• Price Target Upside: 5.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 69 Neutral
• Price Target: $130.00 ▲(12.09% Upside)

American Electric Power's overall score reflects strong earnings call performance and fair valuation, offset by technical indicators suggesting overbought conditions and financial risks from high leverage and negative cash flow growth. The company's strategic capital investments and regulatory successes provide a solid foundation for future growth.

Positive Factors

Capital Plan Expansion

The significant increase in capital investment reflects a commitment to infrastructure growth, which can enhance service reliability and support long-term revenue growth.

Regulatory Success

Positive regulatory developments reduce operational risks and enable smoother implementation of strategic initiatives, supporting sustainable growth.

Transmission Line Upgrade

The loan guarantee for transmission upgrades will enhance grid efficiency and reliability, potentially reducing costs and improving customer satisfaction.

Negative Factors

High Leverage

High leverage can increase financial risk, especially in a rising interest rate environment, potentially impacting long-term financial stability.

Negative Cash Flow Growth

Negative cash flow growth suggests difficulties in converting earnings into cash, which could limit the company's ability to invest in growth opportunities.

Renewable Tax Credit Challenges

Challenges with renewable tax credit eligibility may lead to increased costs or project delays, affecting the company's renewable energy strategy.

American Electric Power Business Overview & Revenue Model

Company Description

American Electric Power Company, Inc., an electric public utility holding company, engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers in the United States. It operates through Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments. The company generates electricity using coal and lignite, natural gas, nuclear, hydro, solar, wind, and other energy sources. It also supplies and markets electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants. American Electric Power Company, Inc. was incorporated in 1906 and is headquartered in Columbus, Ohio.

How the Company Makes Money

AEP generates revenue primarily through the sale of electricity to residential, commercial, and industrial customers. The company's revenue model is based on regulated utility operations, where it earns returns on investments in infrastructure, such as power plants and transmission lines, as approved by state utility commissions. Key revenue streams include retail electricity sales, transmission services, and ancillary services. AEP also engages in wholesale electricity sales and has partnerships with independent power producers and renewable energy developers to diversify its energy portfolio and enhance revenue. Additionally, the company benefits from energy efficiency programs and demand response initiatives, which can provide supplemental revenue through incentive programs and cost savings for customers.

American Electric Power Financial Statement Overview

Summary

American Electric Power demonstrates solid profitability and operational efficiency, with stable revenue growth and strong profit margins. However, the high leverage and negative free cash flow growth present potential risks. The company should focus on improving cash flow generation and managing debt levels to enhance financial stability.

Income Statement

American Electric Power shows a stable revenue growth rate of 2.52% in the TTM, with strong gross and net profit margins at 47.23% and 17.86%, respectively. The EBIT and EBITDA margins are also healthy, indicating efficient operations. However, the revenue growth has been modest, and there is room for improvement in profitability metrics compared to industry leaders.

Balance Sheet

The company's debt-to-equity ratio is high at 87.18, indicating significant leverage, which could pose risks if interest rates rise. However, the return on equity is strong at 18.25%, suggesting effective use of equity to generate profits. The equity ratio is moderate, reflecting a balanced asset structure.

Cash Flow

The free cash flow growth rate is negative, indicating challenges in generating free cash flow. The operating cash flow to net income ratio is below 1, suggesting that not all net income is being converted into cash. The free cash flow to net income ratio is also low, highlighting potential cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.92B	19.92B	19.38B	19.31B	16.62B	14.91B
Gross Profit	6.95B	6.36B	5.62B	4.87B	4.67B	4.28B
EBITDA	8.89B	8.09B	7.21B	7.10B	6.75B	6.21B
Net Income	3.65B	2.97B	2.21B	2.31B	2.49B	2.20B
Balance Sheet
Total Assets	107.78B	103.08B	96.68B	93.40B	87.67B	80.76B
Cash, Cash Equivalents and Short-Term Investments	439.30M	418.30M	544.40M	697.00M	623.80M	593.50M
Total Debt	46.62B	45.76B	43.61B	41.58B	36.66B	34.43B
Total Liabilities	76.81B	76.09B	71.40B	69.35B	64.99B	59.98B
Stockholders Equity	29.87B	26.94B	25.25B	23.89B	22.43B	20.55B
Cash Flow
Free Cash Flow	2.14B	6.66B	-2.49B	-1.48B	-1.92B	-2.48B
Operating Cash Flow	6.57B	6.80B	5.01B	5.29B	3.84B	3.83B
Investing Cash Flow	-9.69B	-7.60B	-6.27B	-7.75B	-6.43B	-6.23B
Financing Cash Flow	3.15B	659.20M	1.08B	2.57B	2.61B	2.41B

American Electric Power Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 115.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEP, the sentiment is Positive. The current price of 115.98 is below the 20-day moving average (MA) of 116.10, above the 50-day MA of 112.33, and above the 200-day MA of 105.24, indicating a neutral trend. The MACD of 1.61 indicates Positive momentum. The RSI at 56.15 is Neutral, neither overbought nor oversold. The STOCH value of 19.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEP.

American Electric Power Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DUK	75 Outperform	$99.05B	20.82	9.60%	3.30%	4.07%	9.94%
D	75 Outperform	$52.11B	21.10	9.29%	4.37%	7.60%	55.99%
NGG	72 Outperform	$75.99B	19.57	8.31%	3.99%	-6.02%	7.24%
AEP	69 Neutral	$62.03B	16.99	13.03%	3.20%	5.84%	36.33%
EXC	68 Neutral	$48.51B	18.24	9.87%	3.29%	4.46%	8.68%
SO	66 Neutral	$105.47B	24.76	12.89%	2.99%	8.53%	-7.53%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

American Electric Power Corporate Events

American Electric Power Issues $2 Billion in Debentures

On September 23, 2025, American Electric Power Company, Inc. announced the issuance of $1.1 billion in Series C Debentures and $900 million in Series D Debentures, both due in 2056. This strategic financial move is expected to bolster the company’s capital structure and potentially enhance its market position by securing long-term funding.

The most recent analyst rating on (AEP) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on American Electric Power stock, see the AEP Stock Forecast page.

American Electric Power Reports Record Earnings and Growth Plans

American Electric Power Company, Inc. (AEP) is a major electric utility company operating in the United States, known for its extensive electric transmission system and diverse generating capacity. It provides reliable and affordable power to millions of customers across 11 states.

AEP Reports Record Earnings and Growth Prospects

American Electric Power Company, Inc. (AEP) has reported a strong financial performance in its latest earnings call, showcasing a mix of optimism and caution. The company highlighted its record-breaking operating earnings, significant load growth, and successful regulatory and legislative outcomes, all of which position it for substantial future growth. However, challenges remain, particularly in regulatory recovery and potential tax credit uncertainties.

Sara Martinez Tucker Resigns as AEP Chair

On July 22, 2025, Sara Martinez Tucker announced her resignation as Chair of the Board of American Electric Power Company, effective July 31, 2025, citing personal reasons and no disagreements with the company. She will continue as an independent Lead Director, while William J. Fehrman, the current CEO and President, will assume the role of Chair effective August 1, 2025, marking a significant leadership transition for the company.

The most recent analyst rating on (AEP) stock is a Buy with a $111.00 price target. To see the full list of analyst forecasts on American Electric Power stock, see the AEP Stock Forecast page.