American Electric Power (AEP) AI Stock Analysis

• Market Cap: $61.44B
• Dividend Yield: 3.25%
• Average Volume (3M): 2.89M
• Price to Earnings (P/E): 16.8
• Beta (1Y): -0.04
• Revenue Growth: 7.66%
• EPS Growth: 37.42%
• Country: US
• Employees: 16,330
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 1.80
• Shares Outstanding: 534,094,540
• 10 Day Avg. Volume: 2,364,178
• 30 Day Avg. Volume: 2,891,954
• PEG Ratio: 0.52
• Price to Book (P/B): 1.81
• Price to Sales (P/S): 2.45
• P/FCF Ratio: 7.34
• Enterprise Value/Market Cap: 1.76
• Enterprise Value/Revenue: 5.04
• Enterprise Value/Gross Profit: 13.60
• Enterprise Value/Ebitda: 11.92
• 1Y Price Target: $127.87
• Price Target Upside: 12.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $127.00 ▲(11.70% Upside)

American Electric Power's overall score is driven by strong earnings call sentiment and solid financial performance. However, technical indicators suggest bearish momentum, and valuation metrics are moderate. The company's strategic growth plans and positive regulatory environment are significant strengths.

Positive Factors

Long-Term Earnings Growth

The increased earnings growth rate indicates strong future profitability, driven by strategic investments and market demand, enhancing shareholder value.

Capital Investment Plan

The substantial capital investment plan supports infrastructure expansion and modernization, positioning AEP for sustained growth and competitive advantage.

Regulatory Support

Favorable regulatory developments enhance AEP's ability to implement strategic initiatives, ensuring stable returns and operational flexibility.

Negative Factors

Debt Levels

High leverage can limit financial flexibility and increase risk, especially in a rising interest rate environment, potentially impacting long-term stability.

Gross Profit Margin Decline

Declining gross profit margins suggest potential cost management issues, which could affect profitability and competitive positioning over time.

Regulatory Challenges in West Virginia

Regulatory challenges in key regions could hinder operational efficiency and financial performance, impacting long-term growth prospects.

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 Vertically Integrated Utilities, Transmission and Distribution Utilities, AEP Transmission Holdco, and Generation & Marketing segments. The company generates electricity using coal and lignite, natural gas, nuclear, hydro, solar, wind, and other energy sources. It also supplies and markets electric power at wholesale to other electric utility companies, rural electric cooperatives, municipalities, and other market participants. American Electric Power Company, Inc. was incorporated in 1906 and is headquartered in Columbus, Ohio.

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 public utility commissions. These rates are typically based on the cost of providing service, including operating expenses, maintenance costs, and a reasonable return on investment. Key revenue streams include electricity sales, transmission service fees, and distribution service fees. Additionally, AEP invests in renewable energy projects and may receive incentives or tax credits that contribute to its revenue. Strategic partnerships with other energy companies and investments in energy infrastructure also enhance its earning potential.

American Electric Power Financial Statement Overview

Summary

American Electric Power demonstrates strong profitability with high EBIT and net profit margins. However, challenges exist in maintaining gross profit margins and managing debt levels. Cash flow generation is generally positive, but historical volatility suggests potential risks.

Income Statement

American Electric Power shows a stable revenue growth rate of 2.5% TTM, with strong EBIT and EBITDA margins at 70.6% and 112.7% respectively. The net profit margin is exceptionally high at 46.8% TTM, indicating robust profitability. However, the gross profit margin has decreased compared to previous years, suggesting potential cost management issues.

Balance Sheet

The company's debt-to-equity ratio is 1.56 TTM, indicating a moderate level of leverage. Return on equity is strong at 36.2%, reflecting efficient use of equity. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing, which could pose risks in a rising interest rate environment.

Cash Flow

Operating cash flow is healthy, with a coverage ratio of 0.57 TTM. Free cash flow growth is positive at 1.05% TTM, and the free cash flow to net income ratio is 0.33, indicating a reasonable conversion of profits into cash. However, the company has experienced fluctuations in free cash flow in previous years, which could indicate volatility in cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.44B	19.92B	19.38B	19.31B	16.62B	14.91B
Gross Profit	7.95B	6.36B	5.62B	4.87B	4.67B	4.28B
EBITDA	9.08B	8.09B	7.21B	7.10B	6.75B	6.21B
Net Income	3.66B	2.97B	2.21B	2.31B	2.49B	2.20B
Balance Sheet
Total Assets	110.25B	103.08B	96.68B	93.40B	87.67B	80.76B
Cash, Cash Equivalents and Short-Term Investments	1.33B	418.30M	544.40M	697.00M	623.80M	593.50M
Total Debt	47.89B	45.76B	43.61B	41.58B	36.66B	34.43B
Total Liabilities	78.71B	76.09B	71.40B	69.35B	64.99B	59.98B
Stockholders Equity	30.39B	26.94B	25.25B	23.89B	22.43B	20.55B
Cash Flow
Free Cash Flow	2.17B	6.66B	-2.49B	-1.48B	-1.92B	-2.48B
Operating Cash Flow	6.86B	6.80B	5.01B	5.29B	3.84B	3.83B
Investing Cash Flow	-10.58B	-7.60B	-6.27B	-7.75B	-6.43B	-6.23B
Financing Cash Flow	4.53B	659.20M	1.08B	2.57B	2.61B	2.41B

American Electric Power Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 113.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 113.7 is below the 20-day moving average (MA) of 115.01, below the 50-day MA of 118.16, and above the 200-day MA of 109.27, indicating a neutral trend. The MACD of -0.88 indicates Negative momentum. The RSI at 39.08 is Neutral, neither overbought nor oversold. The STOCH value of 41.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AEP.

American Electric Power Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NGG	74 Outperform	$78.23B	21.14	7.53%	4.03%	-7.06%	38.21%
DUK	70 Outperform	$91.56B	18.51	9.92%	3.61%	4.80%	14.44%
AEP	69 Neutral	$61.44B	16.83	12.85%	3.25%	7.66%	37.42%
SO	68 Neutral	$96.37B	21.76	13.06%	3.40%	9.40%	-6.05%
EXC	67 Neutral	$44.29B	15.69	10.31%	3.68%	6.07%	15.20%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
D	58 Neutral	$50.14B	19.98	9.27%	4.59%	12.72%	4.90%

American Electric Power Corporate Events

American Electric Power Grants CEO Long-Term Retention Equity Award

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 performance. The package consists of $10 million in performance shares that may vest based on relative total shareholder return over a five-year period ending December 31, 2030, subject to his continued employment, and $5 million in restricted stock units that will vest on December 31, 2030 if he remains with AEP, underscoring the company’s focus on long-term leadership stability and performance-based executive incentives.

The most recent analyst rating on (AEP) stock is a Buy with a $137.00 price target. To see the full list of analyst forecasts on American Electric Power stock, see the AEP Stock Forecast page.

American Electric Power Announces $1 Billion Debenture Sale

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 Debentures, aims to strengthen the company’s financial position by increasing the aggregate principal amount of outstanding debentures to $1.5 billion each for both series, potentially impacting its market standing and stakeholder interests.

The most recent analyst rating on (AEP) stock is a Buy with a $128.00 price target. To see the full list of analyst forecasts on American Electric Power stock, see the AEP Stock Forecast page.

American Electric Power’s New $3.5 Billion Stock Agreement

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, including at-the-market offerings and forward stock purchase transactions, which could impact the company’s capital structure and market positioning. The company also terminated a previous agreement from November 2023, which had a lower sales cap of $1.7 billion, indicating a strategic shift in its funding approach.

The most recent analyst rating on (AEP) stock is a Buy with a $128.00 price target. To see the full list of analyst forecasts on American Electric Power stock, see the AEP Stock Forecast page.