American Electric Power (AEP) AI Stock Analysis

• Market Cap: $64.39B
• Dividend Yield: 3.2%
• Average Volume (3M): 3.54M
• Price to Earnings (P/E): 17.6
• Beta (1Y): 0.01
• 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: 535,265,600
• 10 Day Avg. Volume: 3,763,109
• 30 Day Avg. Volume: 3,540,859
• 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: 1.68
• Enterprise Value/Revenue: 5.04
• Enterprise Value/Gross Profit: 13.60
• Enterprise Value/Ebitda: 12.08
• 1Y Price Target: $126.14
• Price Target Upside: 5.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15
• EPS Forecast (FY): 5.91
• Revenue Forecast (FY): $21.36B

• Rating: 72 Outperform
• Price Target: $135.00 ▲(12.94% Upside)

AEP's overall stock score is driven by strong financial performance and a positive outlook from the earnings call, highlighting significant growth potential and strategic investments. Technical indicators suggest a positive trend, though caution is warranted due to potential overbought conditions. Valuation is reasonable but not exceptional.

Positive Factors

Long-Term Earnings Growth

The increased long-term earnings growth rate reflects strong future prospects, driven by strategic investments and market demand, ensuring sustained profitability.

Capital Investment Plan

The substantial capital investment plan aims to enhance infrastructure and capacity, supporting long-term growth and competitive positioning in the utility sector.

Regulatory Progress

Favorable regulatory developments provide a stable framework for operations, enhancing AEP's ability to execute its growth strategy and improve returns.

Negative Factors

Debt Levels

High debt levels can limit financial flexibility and pose risks, especially in a rising interest rate environment, potentially impacting long-term financial health.

Gross Profit Margin Decline

A declining gross profit margin suggests potential cost management issues, which could pressure profitability if not addressed effectively.

Regulatory Challenges in West Virginia

Regulatory challenges in West Virginia could impact AEP's ability to maintain favorable rates and returns, affecting regional operations and financial performance.

American Electric Power Business Overview & Revenue Model

Company Description

American Electric Power (AEP) is one of the largest electric utility companies in the United States, serving approximately 5.5 million customers across 11 states. It operates in the electric utility sector, primarily focusing on the generation, transmission, and distribution of electricity. AEP's core products include electricity generation from various sources, including coal, natural gas, and renewable energy, as well as providing related services such as energy efficiency programs and customer solutions.

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 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	8.96B	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: Positive
• Last Price: 119.53
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 119.53 is above the 20-day moving average (MA) of 118.29, above the 50-day MA of 113.55, and above the 200-day MA of 106.43, indicating a bullish trend. The MACD of 1.75 indicates Positive momentum. The RSI at 59.60 is Neutral, neither overbought nor oversold. The STOCH value of 63.49 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
DUK	75 Outperform	$96.29B	20.25	9.60%	3.39%	4.07%	9.94%
NGG	74 Outperform	$74.18B	19.11	8.31%	4.03%	-6.02%	7.24%
AEP	72 Outperform	$64.39B	17.60	12.85%	3.20%	7.66%	37.42%
EXC	72 Outperform	$46.86B	16.60	10.31%	3.36%	6.07%	15.20%
SO	69 Neutral	$100.65B	22.72	13.06%	2.99%	9.40%	-6.05%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
D	63 Neutral	$50.65B	20.19	9.27%	4.53%	12.72%	4.90%

American Electric Power Corporate Events

American Electric Power’s Ambitious Growth and Earnings Outlook

American Electric Power Company, Inc. (AEP) is a major utility company in the United States, specializing in electric power generation, transmission, and distribution, with a focus on enhancing infrastructure to meet growing energy demands. The company operates the nation’s largest electric transmission system and serves millions of customers across 11 states.

AEP’s Earnings Call Highlights Robust Growth and Strategic Investments

The recent earnings call for American Electric Power Company, Inc. (AEP) exuded a positive sentiment, highlighting the company’s robust financial health and strategic growth plans. Despite some challenges, particularly in West Virginia, the overall tone was optimistic, driven by significant load growth and favorable regulatory and legislative developments. AEP’s long-term vision is underscored by a substantial capital investment plan and strong financial performance, setting a promising trajectory for the future.

American Electric Power Issues $2 Billion in Debentures

On September 23, 2025, American Electric Power Company, Inc. announced the issuance of $1.1 billion in Series C Debentures and $900 million in Series D Debentures, both due in 2056. This strategic financial move is expected to bolster the company’s capital structure and potentially enhance its market position by securing long-term funding.

The most recent analyst rating on (AEP) stock is a Buy with a $115.00 price target. To see the full list of analyst forecasts on American Electric Power stock, see the AEP Stock Forecast page.

American Electric Power Reports Record Earnings and Growth Plans

American Electric Power Company, Inc. (AEP) is a major electric utility company operating in the United States, known for its extensive electric transmission system and diverse generating capacity. It provides reliable and affordable power to millions of customers across 11 states.

AEP Reports Record Earnings and Growth Prospects

American Electric Power Company, Inc. (AEP) has reported a strong financial performance in its latest earnings call, showcasing a mix of optimism and caution. The company highlighted its record-breaking operating earnings, significant load growth, and successful regulatory and legislative outcomes, all of which position it for substantial future growth. However, challenges remain, particularly in regulatory recovery and potential tax credit uncertainties.