American Electric Power (AEP) AI Stock Analysis

• Market Cap: $58.23B
• Dividend Yield: 3.41%
• Average Volume (3M): 3.09M
• Price to Earnings (P/E): 15.9
• Beta (1Y): 0.04
• Revenue Growth: 5.84%
• EPS Growth: 36.33%
• Country: US
• Employees: 16,330
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Electric
• EPS (TTM): 1.43
• Shares Outstanding: 534,794,740
• 10 Day Avg. Volume: 3,099,974
• 30 Day Avg. Volume: 3,090,888
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.77
• Enterprise Value/Revenue: 4.92
• Enterprise Value/Gross Profit: 14.80
• Enterprise Value/Ebitda: 11.57
• 1Y Price Target: $115.75
• Price Target Upside: 6.06% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 74 Outperform
• Price Target: $126.00 ▲(15.45% Upside)

AEP's overall stock score is driven by strong earnings performance and positive technical indicators. The company's strategic investments and regulatory achievements support future growth, but high leverage and cash flow challenges pose risks. The valuation is fair, with a reasonable P/E ratio and attractive dividend yield.

Positive Factors

Strong Financial Performance

Record-breaking earnings indicate robust financial health and operational efficiency, supporting long-term growth and stability.

Increased Capital Investment

The expanded capital plan reflects commitment to infrastructure development, enhancing service reliability and future growth potential.

Strategic Partnerships

The partnership supports AEP's capital plan, boosting infrastructure development and grid reliability, crucial for long-term success.

Negative Factors

High Leverage

High leverage can increase financial risk, especially if interest rates rise, potentially impacting long-term financial flexibility.

Negative Free Cash Flow Growth

Negative cash flow growth suggests difficulties in generating cash, which may hinder investment and debt management capabilities.

Regulatory Challenges

Regulatory delays can impede investment recovery and growth, affecting long-term strategic execution and financial performance.

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 residential, commercial, and industrial customers. The company's revenue model is based on regulated utility operations, where it earns returns on investments in infrastructure, such as power plants and transmission lines, as approved by state utility commissions. Key revenue streams include retail electricity sales, transmission services, and ancillary services. AEP also engages in wholesale electricity sales and has partnerships with independent power producers and renewable energy developers to diversify its energy portfolio and enhance revenue. Additionally, the company benefits from energy efficiency programs and demand response initiatives, which can provide supplemental revenue through incentive programs and cost savings for customers.

American Electric Power Financial Statement Overview

Summary

American Electric Power demonstrates solid profitability and operational efficiency, with stable revenue growth and strong profit margins. However, the high leverage and negative free cash flow growth present potential risks. The company should focus on improving cash flow generation and managing debt levels to enhance financial stability.

Income Statement

American Electric Power shows a stable revenue growth rate of 2.52% in the TTM, with strong gross and net profit margins at 47.23% and 17.86%, respectively. The EBIT and EBITDA margins are also healthy, indicating efficient operations. However, the revenue growth has been modest, and there is room for improvement in profitability metrics compared to industry leaders.

Balance Sheet

The company's debt-to-equity ratio is high at 87.18, indicating significant leverage, which could pose risks if interest rates rise. However, the return on equity is strong at 18.25%, suggesting effective use of equity to generate profits. The equity ratio is moderate, reflecting a balanced asset structure.

Cash Flow

The free cash flow growth rate is negative, indicating challenges in generating free cash flow. The operating cash flow to net income ratio is below 1, suggesting that not all net income is being converted into cash. The free cash flow to net income ratio is also low, highlighting potential cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.92B	19.92B	19.38B	19.31B	16.62B	14.91B
Gross Profit	6.95B	6.36B	5.62B	4.87B	4.67B	4.28B
EBITDA	8.89B	8.09B	7.21B	7.10B	6.75B	6.21B
Net Income	3.65B	2.97B	2.21B	2.31B	2.49B	2.20B
Balance Sheet
Total Assets	107.78B	103.08B	96.68B	93.40B	87.67B	80.76B
Cash, Cash Equivalents and Short-Term Investments	439.30M	418.30M	544.40M	697.00M	623.80M	593.50M
Total Debt	46.62B	45.76B	43.61B	41.58B	36.66B	34.43B
Total Liabilities	76.81B	76.09B	71.40B	69.35B	64.99B	59.98B
Stockholders Equity	29.87B	26.94B	25.25B	23.89B	22.43B	20.55B
Cash Flow
Free Cash Flow	2.14B	6.66B	-2.49B	-1.48B	-1.92B	-2.48B
Operating Cash Flow	6.57B	6.80B	5.01B	5.29B	3.84B	3.83B
Investing Cash Flow	-9.69B	-7.60B	-6.27B	-7.75B	-6.43B	-6.23B
Financing Cash Flow	3.15B	659.20M	1.08B	2.57B	2.61B	2.41B

American Electric Power Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 109.14
• 50DMA: Negative
• 100DMA: Positive
• 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 Positive. The current price of 109.14 is above the 20-day moving average (MA) of 108.42, below the 50-day MA of 110.20, and above the 200-day MA of 102.63, indicating a neutral trend. The MACD of -0.58 indicates Negative momentum. The RSI at 51.13 is Neutral, neither overbought nor oversold. The STOCH value of 69.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEP.

American Electric Power Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
D	75 Outperform	51.49B	20.62	8.39%	4.43%	7.60%	55.99%
AEP	74 Outperform	$58.23B	15.95	13.03%	3.41%	5.84%	36.33%
NGG	72 Outperform	70.22B	17.93	7.68%	4.30%	-6.02%	7.24%
DUK	71 Outperform	95.66B	20.00	9.50%	3.41%	4.07%	9.94%
EXC	68 Neutral	44.53B	16.62	9.61%	3.58%	4.46%	8.68%
SO	66 Neutral	103.99B	24.19	12.59%	3.09%	8.53%	-7.53%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

American Electric Power Corporate Events

Sara Martinez Tucker Resigns as AEP Chair

On July 22, 2025, Sara Martinez Tucker announced her resignation as Chair of the Board of American Electric Power Company, effective July 31, 2025, citing personal reasons and no disagreements with the company. She will continue as an independent Lead Director, while William J. Fehrman, the current CEO and President, will assume the role of Chair effective August 1, 2025, marking a significant leadership transition for the company.

The most recent analyst rating on (AEP) stock is a Buy with a $111.00 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 Executive Leadership Change

On June 17, 2025, American Electric Power (AEP) announced that David Feinberg will step down from his role as executive vice president and general counsel, effective July 13, 2025. He will transition to the position of senior advisor to the CEO from July 14, 2025, until his departure on August 15, 2025, marking the end of his employment with AEP.

The most recent analyst rating on (AEP) stock is a Buy with a $111.00 price target. To see the full list of analyst forecasts on American Electric Power stock, see the AEP Stock Forecast page.

American Electric Power Finalizes $2.82 Billion Partnership

On June 5, 2025, American Electric Power (AEP) finalized a strategic partnership with KKR and PSP Investments, resulting in a $2.82 billion investment for a 19.9% equity interest in AEP’s Ohio and Indiana Michigan transmission companies. This transaction, initially announced in January 2025, supports AEP’s five-year, $54 billion capital plan and is expected to facilitate infrastructure development to meet the growing energy demand in its service territories. The partnership underscores AEP’s leadership in the transmission sector and aims to enhance grid reliability and service to its customers.

The most recent analyst rating on (AEP) stock is a Buy with a $111.00 price target. To see the full list of analyst forecasts on American Electric Power stock, see the AEP Stock Forecast page.