American Electric Power Company, Inc. (AEP)
NASDAQ:AEP
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American Electric Power
(NASDAQ:AEP)
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Rating:70Outperform
Price Target:
$143.00
â–²(6.99% Upside)
Action:Reiterated
Date:05/09/26
The score is driven by a strong, upbeat earnings call with reaffirmed guidance, an expanded $78B capital plan, and accelerating contracted-load/transmission momentum. Financial performance is steady with improving profitability and cash flow, but leverage and only moderate cash-flow coverage constrain the fundamentals. Technically, near-term price/momentum is soft, and valuation looks only moderately attractive given a ~20x P/E and ~2.9% yield.
Positive Factors
Contracted large-load growth
AEP has secured 63 GW of contracted load (added 7 GW q/q), mostly hyperscale data centers. These long-term contracts create durable demand visibility, underpin future transmission/generation buildouts, and drive multi-year rate-base growth and predictable regulated cash flows.
Negative Factors
Elevated leverage
AEP's leverage (~1.6–1.7x equity) is elevated for a regulated utility, limiting financial flexibility during a large capex cycle. Higher debt increases sensitivity to interest-rate moves, constrains incremental financing options, and tightens headroom on credit metrics over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Contracted large-load growth
AEP has secured 63 GW of contracted load (added 7 GW q/q), mostly hyperscale data centers. These long-term contracts create durable demand visibility, underpin future transmission/generation buildouts, and drive multi-year rate-base growth and predictable regulated cash flows.
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
$70.12B
Dividend Yield3.25%
Average Volume (3M)3.66M
Price to Earnings (P/E)20.3
Beta (1Y)-0.05
Revenue Growth9.38%
EPS Growth31.12%
CountryUS
Employees16,330
SectorUtilities
Sector Strength65
IndustryRegulated Electric
Share Statistics
EPS (TTM)6.77
Shares Outstanding544,105,000
10 Day Avg. Volume5,709,600
30 Day Avg. Volume3,660,374
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 Cap1.73
Enterprise Value/Revenue5.49
Enterprise Value/Gross Profit13.58
Enterprise Value/Ebitda13.98
Forecast
1Y Price Target
$141.65Price Target Upside5.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
EPS Forecast (FY)6.35
Revenue Forecast (FY)$23.36B
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 primarily makes money through regulated utility operations. Its regulated electric utilities earn revenue by charging approved rates to deliver electricity to customers; these rates are set through state public utility commission processes and...
American Electric Power Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call was broadly positive: management reported solid Q1 results, substantial contracted load momentum (63 GW), an expanded $78B five-year capital plan, major transmission awards, secured long-lead equipment and improved regulatory outcomes and ROEs. Financing actions and balance-sheet metrics were presented as disciplined and supportive of growth. Key risks include interconnection and timing challenges in PJM and ERCOT, modestly higher O&M and segment expense pressures, and project timing uncertainties (e.g., Wyoming fuel cells). Overall, the company emphasized execution, conservative capital inclusion, and a path to further upside, with the positives materially outweighing the identified operational and timing risks.Positive Updates
Strong Quarterly Earnings and Guidance Reaffirmed
Q1 2026 operating earnings of $1.64 per share ($891M), up from $1.54 in Q1 2025 (+~6.5% YoY). Company reaffirmed full-year 2026 operating earnings guidance of $6.15–$6.45 per share.
Negative Updates
PJM Interconnection and Market Performance Concerns
Management flagged significant issues with PJM's speed and efficiency of interconnection and stakeholder processes; company is assessing options (including alternative structures) if interconnection timelines do not improve, creating market and execution risk.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Quarterly Earnings and Guidance Reaffirmed
Q1 2026 operating earnings of $1.64 per share ($891M), up from $1.54 in Q1 2025 (+~6.5% YoY). Company reaffirmed full-year 2026 operating earnings guidance of $6.15–$6.45 per share.
Read all positive updates
Company Guidance
AEP reaffirmed full‑year 2026 operating earnings guidance of $6.15–$6.45 per share after reporting Q1 operating earnings of $1.64/sh ($891M) and reiterated a premium operating‑earnings growth target of 7%–9% for 2026–2030, which with today's actions raises expected long‑term operating‑earnings CAGR to greater than 9%. The company increased its 5‑year capital plan to $78 billion (from $72B, +$6B), driving an expected 11% 5‑year rate‑base CAGR, with $33B of transmission investment (42% of the plan) and generation capex expanded to $24B (up $3B) through 2030. Contracted load rose to 63 GW (up 7 GW q/q from 56 GW), including 53 GW in Texas and Ohio and 41 GW in ERCOT (from 36 GW), ~90% of which are data centers; AEP has secured more than 10 GW of gas turbine capacity and has line‑of‑sight to >$10B of additional projects. Management forecasted up to $16B of cost offsets for existing customers from large‑load ESAs, closed a $1.6B DOE loan guarantee projected to deliver >$275M in customer savings, secured ~$315M in federal grants, and expects O&M to rise ~4% CAGR. To fund growth it modestly increased growth equity by $1.1B to $7B for 2026–2030, has issued $665M of ATM equity at an average >$131/share (about two‑thirds of 2026 equity needs), and maintains FFO‑to‑debt metrics of ~14.7% (S&P) and 13.9% (Moody’s) while regulated earned ROE was 9.3% for the quarter (target ≈9.5% by 2030).American Electric Power Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
62
Positive
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 22.16B | 21.78B | 19.92B | 19.38B | 19.31B | 16.62B |
| Gross Profit | 8.95B | 6.93B | 6.36B | 5.62B | 4.87B | 4.67B |
| EBITDA | 8.70B | 8.79B | 8.09B | 7.21B | 7.10B | 6.75B |
| Net Income | 3.65B | 3.58B | 2.97B | 2.21B | 2.31B | 2.49B |
Balance Sheet | ||||||
| Total Assets | 117.78B | 117.25B | 103.08B | 96.68B | 93.40B | 87.67B |
| Cash, Cash Equivalents and Short-Term Investments | 549.00M | 488.00M | 418.30M | 544.40M | 697.00M | 623.80M |
| Total Debt | 51.78B | 50.24B | 45.76B | 43.61B | 41.58B | 36.66B |
| Total Liabilities | 84.80B | 84.99B | 76.09B | 71.40B | 69.35B | 64.99B |
| Stockholders Equity | 31.81B | 31.14B | 26.94B | 25.25B | 23.89B | 22.43B |
Cash Flow | ||||||
| Free Cash Flow | 6.18B | 6.81B | 6.66B | -2.49B | -1.48B | -1.92B |
| Operating Cash Flow | 7.01B | 6.94B | 6.80B | 5.01B | 5.29B | 3.84B |
| Investing Cash Flow | -10.59B | -9.12B | -7.60B | -6.27B | -7.75B | -6.43B |
| Financing Cash Flow | 3.62B | 2.20B | 659.20M | 1.08B | 2.57B | 2.61B |
American Electric Power Technical Analysis
Neutral
133.66
Price Trends
131.38
Negative
126.36
Positive
119.58
Positive
Market Momentum
-1.14
Positive
45.08
Neutral
44.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEP, the sentiment is Neutral. The current price of 133.66 is above the 20-day moving average (MA) of 131.71, above the 50-day MA of 131.38, and above the 200-day MA of 119.58, indicating a neutral trend. The MACD of -1.14 indicates Positive momentum. The RSI at 45.08 is Neutral, neither overbought nor oversold. The STOCH value of 44.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $70.12B | 20.32 | 11.86% | 3.25% | 9.38% | 31.12% | |
66 Neutral | $105.54B | 20.00 | 12.28% | 3.40% | 8.33% | -6.26% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $96.52B | 16.43 | 9.85% | 3.61% | 7.21% | 8.97% | |
60 Neutral | $59.57B | 21.87 | 10.51% | 4.59% | 19.15% | 27.09% | |
60 Neutral | $83.90B | 19.21 | 8.47% | 4.03% | 1.13% | 13.82% | |
59 Neutral | $45.91B | 13.66 | 9.76% | 3.68% | 4.58% | 1.43% |
* Utilities Sector Average
AEP
American Electric Power
128.87
29.10
29.17%
D
Dominion Energy
67.73
13.70
25.36%
DUK
Duke Energy
123.81
11.30
10.05%
EXC
Exelon
44.87
1.82
4.22%
NGG
National Grid Transco
84.72
14.21
20.15%
SO
Southern Co
93.62
6.80
7.83%
American Electric Power Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
American Electric Power Shareholders Expand Authorized Common Stock
Positive
Apr 29, 2026
At its April 28, 2026 annual meeting, American Electric Power shareholders approved an amendment to increase authorized common shares from 600 million to 900 million, potentially expanding the company’s flexibility for future equity issuance...
Executive/Board Changes
American Electric Power Announces Planned Board Member Departure
Neutral
Feb 17, 2026
On February 13, 2026, American Electric Power disclosed that board member Henry P. Linginfelter informed the Board he would not stand for re-election at the company’s 2026 annual meeting of shareholders. The company emphasized that Linginfel...
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.