American Electric Power (AEP)
NASDAQ:AEP
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American Electric Power
(NASDAQ:AEP)
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Rating:80Outperform
Price Target:
$141.00
â–²(6.08% Upside)
Action:ReiteratedDate:02/13/26
The score is driven primarily by strong earnings-call momentum (guidance beat/reaffirmation and an expanded contracted load and capital runway) and solid technical strength with the stock trading above key moving averages. Financial performance is steady but moderated by cash-flow-to-earnings mismatch and data consistency concerns around 2025 balance-sheet metrics, while valuation is supportive but not a clear bargain.
Positive Factors
Contracted incremental load (56 GW)
Doubling contracted incremental load to 56 GW, backed by signed agreements and substantial ERCOT LOAs, creates long-duration, take-or-pay style cash flows. This materially expands visible demand that supports multi-year rate base growth and predictable regulated and contracted revenue streams.
Negative Factors
Balance sheet inconsistency / leverage uncertainty
A sharp, atypical 2025 leverage shift and missing asset fields reduce confidence in reported leverage and comparability. For a capital-intensive utility, unclear balance-sheet metrics complicate assessment of financing flexibility, covenants, and true credit risk, raising structural funding uncertainty.
Read all positive and negative factors
Positive Factors
Negative Factors
Contracted incremental load (56 GW)
Doubling contracted incremental load to 56 GW, backed by signed agreements and substantial ERCOT LOAs, creates long-duration, take-or-pay style cash flows. This materially expands visible demand that supports multi-year rate base growth and predictable regulated and contracted revenue streams.
Read all positive factors
American Electric Power (AEP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$71.89B
Dividend Yield3.25%
Average Volume (3M)3.58M
Price to Earnings (P/E)25.7
Beta (1Y)>-0.01
Revenue Growth7.66%
EPS Growth37.42%
CountryUS
Employees16,330
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)1.19
Shares Outstanding540,861,450
10 Day Avg. Volume2,608,030
30 Day Avg. Volume3,575,129
Financial Highlights & Ratios
PEG Ratio0.88
Price to Book (P/B)1.92
Price to Sales (P/S)2.75
P/FCF Ratio8.78
Enterprise Value/Market Cap1.70
Enterprise Value/Revenue5.59
Enterprise Value/Gross Profit17.59
Enterprise Value/Ebitda13.87
Forecast
1Y Price Target
$138.50Price Target Upside4.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)6.34
Revenue Forecast (FY)$23.14B
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 Vertic...
How the Company Makes Money
AEP generates revenue primarily through the sale of electricity to its customers, which includes residential, commercial, and industrial sectors. The company operates regulated utility subsidiaries, which are allowed to charge rates set by state p...
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 Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed strong positive momentum: AEP exceeded 2025 earnings guidance, delivered robust sales and shareholder returns, doubled contracted incremental load to 56 GW (backed by agreements), reaffirmed 2026 guidance and a premium long-term growth outlook, and identified incremental capital opportunities beyond a conservative $72B plan. Management emphasized transmission scale, regulatory wins, improved ROE, and healthy near-term credit metrics. Key risks discussed include timing/execution of load connections (dependent on RTO/state reforms), additional capital and financing needs as the plan expands, increased reliability and financing costs, and potential supply chain/labor constraints. Overall, the positives (growth, contracted load, regulatory progress, and financial outperformance) substantially outweigh the operational and timing risks mentioned.Positive Updates
Exceeded 2025 Earnings Guidance
2025 operating earnings of $5.97 per share, above the high end of guidance ($5.75–$5.95); Q4 2025 operating earnings of $1.19 per share.
Negative Updates
Increased Reliability Spending and Higher Operating Costs
2025 results were partially offset by additional spending on system reliability, higher depreciation tied to a growing capital base, and elevated interest expense.
Read all updates
Q4-2025 Updates
Positive
Negative
Exceeded 2025 Earnings Guidance
2025 operating earnings of $5.97 per share, above the high end of guidance ($5.75–$5.95); Q4 2025 operating earnings of $1.19 per share.
Read all positive updates
Company Guidance
AEP reaffirmed its 2026 operating earnings guidance of $6.15–$6.45 per share (midpoint $6.30) after reporting 2025 operating earnings of $5.97 per share (Q4 $1.19) that exceeded the prior $5.75–$5.95 range; management also reiterated a premium long‑term earnings growth target of 7%–9% (9% expected CAGR for 2026–2030) and highlighted a $72 billion five‑year capital plan (10% rate‑base CAGR) with $5–$8 billion of confirmed/endorsed incremental generation and transmission upside. Other financial and operational metrics underpinning the guidance include a year‑end FFO/debt above target (S&P 15.2%, Moody’s just under 14% vs. a 14%–15% target), a 2025 earned regulated ROE of 9.1% (up 30 bps vs. two years prior, with a path to ~9.5%), total system sales >200 million MWh, retail sales +7.5% (C&I ~+10%, residential ~+3%), revenues +8.3%, 56 GW of contracted incremental load by 2030 (up from 28 GW) including 36 GW of ERCOT LOAs, ~180 GW in the development queue, over 10 GW of secured turbine capacity with manufacturers, and a $2.65 billion Bloom fuel‑cell purchase with a 20‑year offtake — all supporting the company’s confidence in its near‑ and long‑term outlook.American Electric Power Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
67
Positive
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 21.78B | 19.92B | 19.38B | 19.31B | 16.62B |
| Gross Profit | 6.93B | 6.36B | 5.62B | 4.87B | 4.67B |
| EBITDA | 8.79B | 8.09B | 7.21B | 7.10B | 6.75B |
| Net Income | 3.58B | 2.97B | 2.21B | 2.31B | 2.49B |
Balance Sheet | |||||
| Total Assets | 117.25B | 103.08B | 96.68B | 93.40B | 87.67B |
| Cash, Cash Equivalents and Short-Term Investments | 488.00M | 418.30M | 544.40M | 697.00M | 623.80M |
| Total Debt | 50.24B | 45.76B | 43.61B | 41.58B | 36.66B |
| Total Liabilities | 84.99B | 76.09B | 71.40B | 69.35B | 64.99B |
| Stockholders Equity | 31.14B | 26.94B | 25.25B | 23.89B | 22.43B |
Cash Flow | |||||
| Free Cash Flow | 6.81B | 6.66B | -2.49B | -1.48B | -1.92B |
| Operating Cash Flow | 6.94B | 6.80B | 5.01B | 5.29B | 3.84B |
| Investing Cash Flow | -9.12B | -7.60B | -6.27B | -7.75B | -6.43B |
| Financing Cash Flow | 2.20B | 659.20M | 1.08B | 2.57B | 2.61B |
American Electric Power Technical Analysis
Positive
132.92
Price Trends
127.95
Positive
122.45
Positive
115.91
Positive
Market Momentum
0.93
Negative
60.29
Neutral
88.46
Negative
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 132.92 is above the 20-day moving average (MA) of 130.92, above the 50-day MA of 127.95, and above the 200-day MA of 115.91, indicating a bullish trend. The MACD of 0.93 indicates Negative momentum. The RSI at 60.29 is Neutral, neither overbought nor oversold. The STOCH value of 88.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $71.89B | 25.70 | 12.06% | 3.25% | 7.66% | 37.42% | |
74 Outperform | $87.79B | 21.62 | 7.66% | 4.03% | -7.06% | 38.21% | |
71 Outperform | $102.51B | 18.33 | 9.69% | 3.61% | 4.80% | 14.44% | |
66 Neutral | $108.38B | 22.16 | 12.50% | 3.40% | 9.40% | -6.05% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $50.17B | 15.92 | 9.87% | 3.68% | 6.07% | 15.20% | |
63 Neutral | $55.09B | 16.69 | 10.77% | 4.59% | 12.72% | 4.90% |
* Utilities Sector Average
AEP
American Electric Power
132.92
33.87
34.20%
D
Dominion Energy
62.69
12.75
25.54%
DUK
Duke Energy
131.82
19.49
17.35%
EXC
Exelon
49.05
6.27
14.66%
NGG
National Grid Transco
87.52
25.02
40.03%
SO
Southern Co
96.82
11.81
13.89%
American Electric Power Corporate Events
Business Operations and StrategyPrivate Placements and Financing
AEP Subsidiary Advances Major Wyoming Fuel Cell Project
Positive
Jan 8, 2026
On January 4, 2026, an unregulated subsidiary of AEP signed an unconditional agreement to purchase a substantial portion of its option for solid oxide fuel cells for approximately $2.65 billion to develop and build a fuel cell generation facility ...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
American Electric Power Reaches New Governance Accord With Icahn
Neutral
Dec 29, 2025
On December 22, 2025, American Electric Power entered into a Board Observer Agreement with Carl Icahn’s investment entities and Andrew J. Teno, granting Teno a non‑voting observer seat on AEP’s board and securing standstill and m...
Executive/Board Changes
American Electric Power Grants CEO Long-Term Retention Equity Award
Positive
Dec 19, 2025
On December 18, 2025, American Electric Power’s board approved a special equity award for Chair, President and CEO William J. Fehrman as part of the company’s retention strategy and to further align his compensation with company perfor...
Private Placements and Financing
American Electric Power Announces $1 Billion Debenture Sale
Neutral
Dec 5, 2025
On December 3, 2025, American Electric Power Company, Inc. announced the entry into an Underwriting Agreement for the offering and sale of $1 billion in junior subordinated debentures. This financial move, involving Series C and Series D Debenture...
Business Operations and StrategyPrivate Placements and Financing
American Electric Power’s New $3.5 Billion Stock Agreement
Neutral
Nov 25, 2025
On November 25, 2025, American Electric Power Company, Inc. entered into a Distribution Agreement with several financial institutions to sell up to $3.5 billion of its common stock. This agreement allows for sales through various methods, includin...
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.