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American Electric Power
(NASDAQ:AEP)
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Rating:66Neutral
Price Target:
$138.00
▲(1.81% Upside)
Action:Downgraded
Date:07/31/26
The score is driven primarily by solid but constrained financial performance (improving operating cash flow and steady utility profitability offset by high and rising leverage and historically volatile free cash flow). The latest earnings call is a clear positive with raised guidance and de-risking actions supporting the long-term capital plan, while technicals are a near-term headwind with the stock trading below key short- and medium-term moving averages. Valuation appears reasonable with a moderate P/E and a ~3% dividend yield.
Positive Factors
Large regulated capital plan
AEP’s $78B five‑year capital plan and ~11% rate‑base CAGR create a durable earnings runway tied to regulated asset growth. Rate‑base expansion typically yields predictable recoverable returns under utility regulation, supporting multi‑year revenue and allowed‑return growth irrespective of short‑term demand swings.
Negative Factors
Heavy leverage
Rising absolute debt and a utility‑typical but still high leverage ratio reduce financial flexibility. Elevated indebtedness increases sensitivity to interest rates and credit metrics, constraining capacity to absorb cost overruns or accelerate additional projects without dilutive or expensive financing.
Read all positive and negative factors
Positive Factors
Negative Factors
Large regulated capital plan
AEP’s $78B five‑year capital plan and ~11% rate‑base CAGR create a durable earnings runway tied to regulated asset growth. Rate‑base expansion typically yields predictable recoverable returns under utility regulation, supporting multi‑year revenue and allowed‑return growth irrespective of short‑term demand swings.
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
$69.53B
Dividend Yield2.96%
Average Volume (3M)5.09M
Price to Earnings (P/E)22.0
Beta (1Y)-0.09
Revenue Growth8.68%
EPS Growth-14.88%
CountryUS
Employees17,581
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)5.78
Shares Outstanding544,105,040
10 Day Avg. Volume3,589,266
30 Day Avg. Volume5,093,407
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$142.77Price Target Upside5.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
EPS Forecast (FY)6.36
Revenue Forecast (FY)$23.34B
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 revenues are largely determined by rates approved by state utility commissions and, for certain transmission assets, by the Federal Energy Regulatory Commission (FERC). Key reve...
American Electric Power Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 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
135.54
Price Trends
131.63
Negative
131.53
Negative
125.17
Positive
Market Momentum
0.34
Positive
55.80
Neutral
70.52
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 135.54 is above the 20-day moving average (MA) of 133.19, above the 50-day MA of 131.63, and above the 200-day MA of 125.17, indicating a neutral trend. The MACD of 0.34 indicates Positive momentum. The RSI at 55.80 is Neutral, neither overbought nor oversold. The STOCH value of 70.52 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $106.35B | 22.67 | 12.38% | 3.06% | 6.40% | 6.90% | |
66 Neutral | $69.53B | 21.97 | 10.01% | 2.79% | 8.68% | -14.88% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $98.44B | 19.21 | 9.85% | 3.26% | 7.21% | 8.97% | |
63 Neutral | $46.64B | 16.72 | 9.61% | 3.45% | 6.56% | 3.72% | |
61 Neutral | $80.28B | 18.03 | 8.47% | 3.94% | 1.13% | 13.83% | |
60 Neutral | $61.33B | 27.45 | 7.41% | 3.76% | 21.47% | ― |
* Utilities Sector Average
AEP
American Electric Power
127.85
16.38
14.70%
D
Dominion Energy
69.17
10.62
18.15%
DUK
Duke Energy
125.43
5.45
4.55%
EXC
Exelon
45.82
2.22
5.10%
NGG
National Grid Transco
79.97
10.15
14.54%
SO
Southern Co
94.54
1.58
1.70%
American Electric Power Corporate Events
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...
Business Operations and StrategyPrivate Placements and Financing
American Electric Power Enters Major Forward Equity Agreements
Neutral
May 14, 2026
On May 12, 2026, American Electric Power entered into forward sale agreements covering 20,472,442 shares of common stock with Bank of America, Goldman Sachs and Morgan Stanley, and on May 13, 2026 expanded these via an option exercise to a total o...
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.