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American Electric Power
(NASDAQ:AEP)
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Rating:64Neutral
Price Target:
$128.00
â–²(4.26% Upside)
Action:Reiterated
Date:09/30/26
The score is anchored by solid but constrained financial performance—steady utility profitability and improving cash flow offset by elevated and rising leverage. A notably positive earnings-call outlook (raised guidance, large contracted load, and de-risked financing) lifts the score, while weak technicals (below key moving averages with negative MACD) and a not-cheap valuation for the sector keep it from scoring higher.
Positive Factors
Regulated utility model
AEP’s regulated utility structure provides recurring customer demand and a framework for recovering prudently incurred costs and invested capital. Transmission and distribution assets can support durable earnings growth when regulators approve rate-base additions and authorized returns remain supportive.
Negative Factors
Heavy and rising leverage
AEP’s rising absolute debt and consistently leveraged capital structure reduce financial flexibility as the company pursues an unusually large investment program. Higher leverage can increase financing sensitivity and constrain the company’s ability to absorb cost increases or delays without additional capital.
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Positive Factors
Negative Factors
Regulated utility model
AEP’s regulated utility structure provides recurring customer demand and a framework for recovering prudently incurred costs and invested capital. Transmission and distribution assets can support durable earnings growth when regulators approve rate-base additions and authorized returns remain supportive.
Read all positive factors
American Electric Power Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows revenue contributions from each business unit, indicating which segments are growing or declining and influencing overall financial health.
Shows revenue contributions from each business unit, indicating which segments are growing or declining and influencing overall financial health.
Data provided by:
The Fly
The FlyAmerican Electric Power (AEP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$65.09B
Dividend Yield3.18%
Average Volume (3M)3.77M
Price to Earnings (P/E)20.5
Beta (1Y)-0.06
Revenue Growth8.63%
EPS Growth-14.89%
CountryUS
Employees17,581
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)5.78
Shares Outstanding544,397,340
10 Day Avg. Volume4,506,830
30 Day Avg. Volume3,770,771
Financial Highlights & Ratios
PEG Ratio0.91
Price to Book (P/B)1.92
Price to Sales (P/S)2.75
P/FCF Ratio8.78
Enterprise Value/Market Cap1.99
Enterprise Value/Revenue5.74
Enterprise Value/Gross Profit11.73
Enterprise Value/Ebitda15.04
Forecast
1Y Price Target
$139.20Price Target Upside13.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)6.38
Revenue Forecast (FY)$23.43B
American Electric Power Business Overview & Revenue Model
Company Description
American Electric Power Company, Inc. (AEP) operates as a prominent electric utility holding company, with its core business encompassing the generation, transmission, and delivery of electricity. Serving both retail and wholesale clients across t...
How the Company Makes Money
AEP primarily makes money through regulated utility operations, where its operating companies provide electric distribution (and in some jurisdictions bundled generation supply) under state utility regulation. In this model, AEP earns revenue by b...
American Electric Power Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call conveyed strong growth momentum and constructive regulatory and financing progress: guidance was raised, large-load contracting accelerated to 69 GW (45 GW in Texas backed by ~$2 billion of collateral), the five-year capital plan doubled versus four years ago to $78 billion, and key DOE financing and a $3 billion equity transaction de-risked funding. Offsetting these positives were near-term timing and comparability headwinds (Transmission Holdco minority sale and tax timing items), modest Q2 EPS decline (-~4.9%), elevated O&M to support reliability, and execution/timing risks tied to interconnection reviews (ERCOT, PJM) and project milestones (e.g., Wyoming fuel cells). On balance, highlights substantially outweigh the lowlights, supporting a positive outlook while noting timing and execution uncertainties.Positive Updates
Raised 2026 Guidance and Strong Earnings Outlook
Raised full-year 2026 operating earnings guidance to $6.25–$6.55 per share (up $0.10 from prior range). Reaffirmed annual operating earnings growth rate of 7%–9% and an operating EPS CAGR >9% through 2030.
Negative Updates
Quarterly EPS Decline Due to Timing Items
Q2 operating EPS declined to $1.36 from $1.43 in Q2 2025 (-~4.9%), primarily driven by the 2025 Transmission Holdco minority interest sale and timing-related income tax items that depressed comparability for the quarter (expected to reverse by year-end).
Read all updates
Q2-2026 Updates
Positive
Negative
Raised 2026 Guidance and Strong Earnings Outlook
Raised full-year 2026 operating earnings guidance to $6.25–$6.55 per share (up $0.10 from prior range). Reaffirmed annual operating earnings growth rate of 7%–9% and an operating EPS CAGR >9% through 2030.
Read all positive updates
Company Guidance
AEP raised 2026 operating earnings guidance to $6.25–$6.55 per share (from $6.15–$6.45), reflecting Q2 operating earnings of $1.36/share ($742M) versus $1.43 last year and year‑to‑date operating EPS of $3.01 (vs $2.98), and reiterated a 7%–9% annual operating earnings growth rate and an operating EPS CAGR of >9% through 2030 based on a $78B 2026–2030 capital plan (nearly 11% rate‑base CAGR) with line‑of‑sight to >$10B incremental opportunities; management targets FFO/debt of 14%–15%, reported regulated earned ROE of 9.2% (with a path to ~9.5% by 2030), de‑risked financing via a $3B marketed equity transaction (to settle by May 2028), and highlighted growth and affordability metrics including 69 GW of contracted large‑load through 2030 (up 6 GW quarter‑over‑quarter; 45 GW in Texas submitted to ERCOT Batch Zero with nearly $2B of cash/collateral), ~13 GW of secured turbines for deployment through 2031 (plus optional access to up to 10 GW to 2035), DOE loans of ~ $5B (including a $3.3B TX loan guarantee), ~$400M of DOE grants and combined estimated customer savings of ~$1.4B, and up to $16B of projected fixed‑cost offsets for residential customers.American Electric Power Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
58
Neutral
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 22.52B | 21.78B | 19.92B | 19.38B | 19.31B | 16.62B |
| Gross Profit | 11.03B | 6.93B | 6.36B | 5.62B | 4.87B | 4.67B |
| EBITDA | 8.60B | 9.34B | 8.09B | 7.21B | 7.10B | 6.75B |
| Net Income | 3.14B | 3.58B | 2.97B | 2.21B | 2.31B | 2.49B |
Balance Sheet | ||||||
| Total Assets | 121.57B | 117.25B | 103.08B | 96.68B | 93.40B | 87.67B |
| Cash, Cash Equivalents and Short-Term Investments | 603.00M | 488.00M | 418.30M | 544.40M | 697.00M | 623.80M |
| Total Debt | 53.50B | 50.24B | 45.76B | 43.61B | 41.58B | 36.66B |
| Total Liabilities | 88.22B | 84.99B | 76.09B | 71.40B | 69.35B | 64.99B |
| Stockholders Equity | 32.14B | 31.14B | 26.94B | 25.25B | 23.89B | 22.43B |
Cash Flow | ||||||
| Free Cash Flow | 8.96B | 6.81B | -966.30M | -2.49B | -1.48B | -1.92B |
| Operating Cash Flow | 7.61B | 6.94B | 6.80B | 5.01B | 5.29B | 3.84B |
| Investing Cash Flow | -10.37B | -9.12B | -7.60B | -6.27B | -7.75B | -6.43B |
| Financing Cash Flow | 2.89B | 2.20B | 659.20M | 1.08B | 2.57B | 2.61B |
American Electric Power Technical Analysis
Negative
122.77
Price Trends
123.64
Negative
126.97
Negative
125.66
Negative
Market Momentum
-1.47
Negative
42.08
Neutral
58.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEP, the sentiment is Negative. The current price of 122.77 is above the 20-day moving average (MA) of 120.83, below the 50-day MA of 123.64, and below the 200-day MA of 125.66, indicating a bearish trend. The MACD of -1.47 indicates Negative momentum. The RSI at 42.08 is Neutral, neither overbought nor oversold. The STOCH value of 58.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AEP.
American Electric Power Risk Analysis
American Electric Power disclosed 44 risk factors in its most recent earnings report. American Electric Power reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
American Electric Power Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $160.27B | 17.19 | 16.82% | 3.17% | 11.83% | 55.48% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
64 Neutral | $65.09B | 20.54 | 10.01% | 3.18% | 8.63% | -14.89% | |
63 Neutral | $88.99B | 17.14 | 9.88% | 3.75% | 6.33% | 8.98% | |
63 Neutral | $42.04B | 14.86 | 9.61% | 4.08% | 6.56% | 3.72% | |
62 Neutral | $96.31B | 20.08 | 12.61% | 3.58% | 6.40% | 6.90% | |
58 Neutral | $53.92B | 21.21 | 8.89% | 4.35% | 21.98% | -0.39% |
* Utilities Sector Average
AEP
American Electric Power
119.57
7.39
6.59%
D
Dominion Energy
61.31
2.33
3.95%
DUK
Duke Energy
114.13
-6.03
-5.02%
EXC
Exelon
40.73
-3.34
-7.58%
NEE
NextEra Energy
76.83
-2.99
-3.74%
SO
Southern Co
83.72
-8.72
-9.43%
American Electric Power Corporate Events
Executive/Board Changes
American Electric Power Executive Departure and Severance Governance
Negative
Sep 30, 2026
On Sept. 29, 2026, American Electric Power’s President Nuclear Development, Alicia Knapp, departed the company in an involuntary separation, activating eligibility for benefits under AEP’s Executive Severance Plan. The plan provides on...
Business Operations and StrategyExecutive/Board Changes
American Electric Power Adds Two Independent Board Directors
Positive
Jul 21, 2026
On July 20, 2026, American Electric Power’s board elected David S. Marriott and Charles J. Meyers as directors, with initial terms running until the 2027 annual meeting of shareholders. Marriott joined the Audit and Technology Committees, wh...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.