Raymond James analyst J.R. Weston has commenced coverage of American Electric Power Company (AEP, Financial) with an Outperform rating. This reflects a positive outlook on AEP's potential in the market. The analyst has set a price target of $115 for AEP, indicating confidence in its future growth and performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for American Electric Power Co Inc (AEP, Financial) is $109.52 with a high estimate of $120.00 and a low estimate of $98.78. The average target implies an upside of 6.31% from the current price of $103.02. More detailed estimate data can be found on the American Electric Power Co Inc (AEP) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, American Electric Power Co Inc's (AEP, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for American Electric Power Co Inc (AEP, Financial) in one year is $100.58, suggesting a downside of 2.37% from the current price of $103.02. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the American Electric Power Co Inc (AEP) Summary page.
AEP Key Business Developments
Release Date: May 06, 2025
- Operating Earnings: $1.54 per share, or $823 million for Q1 2025.
- GAAP Earnings: $1.50 per share for Q1 2025.
- Operating Earnings Guidance: Reaffirmed range of $5.75 to $5.95 per share for 2025.
- Long-term Operating Earnings Growth Rate: 6% to 8%.
- Commercial Load Growth: 12.3% increase in Q1 2025 compared to Q1 2024.
- Retail Load Growth Forecast: 8% to 9% annually through 2027.
- First Quarter Earned ROE: 9.3% for regulated businesses.
- Capital Plan: $54 billion over five years with potential for $10 billion incremental investments.
- Forward Equity Issuance: $2.3 billion completed, meeting equity needs through 2029.
- FFO to Debt Metric: 13.2% for the 12 months ended March 31, 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- American Electric Power Co Inc (AEP, Financial) reported strong first quarter 2025 operating earnings of $1.54 per share, reaffirming their 2025 operating earnings guidance range of $5.75 to $5.95 per share.
- The company is committed to a $54 billion capital investment plan over the next five years, with potential for an additional $10 billion in investments.
- AEP is experiencing significant load growth, particularly in commercial sectors, with a 12.3% increase in commercial load in the first quarter of 2025 compared to the previous year.
- The company has secured positive regulatory outcomes, with approximately 80% of rate-related revenue already secured for 2025.
- AEP's strategic focus on infrastructure investments, including transmission and distribution, positions it well to support future growth and enhance system resilience.
Negative Points
- AEP recorded a $28 million charge related to the write-off of previously deferred OVEC costs due to legislative changes in Ohio.
- The company's residential sales have been declining, driven by increased efficiency and reduced usage, impacting overall margins.
- There is uncertainty surrounding the potential impact of federal tax legislation changes, particularly regarding the transferability of tax credits.
- AEP faces challenges in managing the financial impacts of large-scale capital investments, including maintaining a strong balance sheet and credit metrics.
- The company is navigating potential delays and adjustments in load growth projections, particularly with hyperscale data centers like Microsoft's decision to delay projects.
