American Electric upgraded to Buy at Jefferies on data center growth

Jefferies analyst Julien Dumoulin-Smith upgraded American Electric (AEP) to Buy from Hold with a price target of $137, up from $128. Data center growth enables earned ROE improvement, says the analyst, who argues that the company’s new 7%-9% EPS compound annual growth rate guidance “looks achievable.” From the firm’s talks, it appears many investors are taking a “wait-and-see” approach after American’s strong 14% year-to-date outperformance and questioning the achievability of the new plan, which the firm sees creating an opportunity.