AEP American Electric Power Company, Inc. - Fundamental Analysis
BULLISH
AEP Stock | Fundamental Analysis & Investment Insights
NASDAQ
•
Utilities
•
Utilities - Regulated Electric
Current Price
$121.3
Analyst Target
$127.32
+5.0% Upside
52W High
$123.31
52W Low
$89.91
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
88%
Analysis Accuracy
American Electric Power (AEP) trades near its 52-week high with strong multi-year price momentum, underpinned by consistent profitability, disciplined capital allocation, and a favorable regulatory footprint. Despite modest near-term earnings growth, the company outperforms peers on ROE (12.92% vs sector avg 9.86%) and maintains superior operating margins (25.89%) within a stable, asset-heavy utility framework. Valuation remains reasonable relative to higher-multiple peers like NEE and SO, while the 3.13% dividend yield and 54.5% payout ratio support income appeal. Analysts unanimously recommend the stock with a $127.32 target, implying 5% upside, though insider selling over the past six months presents a minor counter-signal.
Key Strengths
ROE of 12.92% significantly exceeds sector average of 9.86%, reflecting efficient use of equity capital
Operating margin of 25.89% is among the highest in the peer group, indicating strong cost control and pricing power
Dividend yield of 3.13% is attractive within the sector and well-covered by a 54.47% payout ratio
Revenue growth of 10.90% YoY outpaces peer average of 5.87%, driven by rate base expansion and demand tailwinds
Analyst consensus is strongly aligned with a 'buy' rating from 17 analysts and a $127.32 mean target price
Key Risks
Earnings growth of 0.60% YoY is anemic despite strong revenue growth, raising margin compression concerns
Debt/Equity of 1.52 is elevated but within sector norms; however, refinancing risk looms in a higher-for-longer rate environment
Current ratio of 0.69 and quick ratio of 0.42 indicate tight short-term liquidity, below the 1.0 threshold for safety
Insider activity has been uniformly bearish with $4.65M in net sales over the past six months, potentially signaling caution at the top
Forward P/E of 20.59 is above historical levels and implies limited margin of safety if growth disappoints
AI Fair Value Estimate
Based on comprehensive analysis
$127.32
+5.0% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare AEP against industry averages and similar companies
Insider Trading & Analyst Ratings
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