Analyst William Appicelli of UBS maintained a Sell rating on American Electric Power, boosting the price target to $116.00.
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William Appicelli has given his Sell rating due to a combination of factors, primarily focusing on the challenges American Electric Power (AEP) faces in regulatory execution and the pressure on near-term earnings per share (EPS) growth. Despite an increase in capital expenditure plans to $70 billion over the next five years, the anticipated 6% to 8% EPS growth rate is not expected to improve significantly. The upcoming guidance on 2026 EPS and long-term growth rates, along with updates on financing and capital expenditure through 2030, are crucial but uncertain.
Appicelli also notes that AEP’s stock is trading at a slight discount compared to its peers, which he believes already reflects the company’s growth prospects, considering the risks associated with regulatory execution and sales growth trends. Additionally, the recent reduction in the 2025 sales growth forecast and the impact of the West Virginia securitization add to the challenges, despite strong performance in non-regulated assets. The price target has been adjusted to $116, reflecting a modest increase but still indicating a cautious outlook on the stock’s potential.
According to TipRanks, Appicelli is a 4-star analyst with an average return of 21.7% and an 88.89% success rate. Appicelli covers the Utilities sector, focusing on stocks such as Centerpoint Energy, Talen Energy Corp, and Ameren.