AEP: Expanding Contracted Load and Conservative $72B Capital Plan Support 7%–9% EPS Growth and Potential Premium Valuation

Julien Dumoulin Smith, an analyst from Jefferies, maintained the Buy rating on American Electric Power. The associated price target is $150.00.

Julien Dumoulin Smith has given his Buy rating due to a combination of factors tied to AEP’s significantly expanded contracted load and visible growth pipeline. He highlights that contracted demand has doubled to 56 GW by 2030, heavily concentrated in ERCOT, with most volumes secured under long-duration, credit‑worthy agreements and protective tariff structures, which meaningfully reduces demand risk and underpins sustained earnings expansion.

He also points to the $72 billion capital plan as increasingly conservative, with additional confirmed projects and the yet‑to‑be‑included capex needed to serve the latest 28 GW implying further upside to rate base growth and, ultimately, EPS. Supported by improved regulatory mechanisms that accelerate cost recovery and a growing transmission earnings mix, he sees AEP well positioned to deliver a 7%–9% EPS growth trajectory, with the potential for a premium valuation versus peers despite manageable execution and regulatory risks.

In another report released on February 13, Wells Fargo also maintained a Buy rating on the stock with a $141.00 price target.