Analyst Note| Andrew Bischof, CFA, CPA |
We are reaffirming our $89 fair value estimate after American Electric Power reported full-year operating earnings per share of $4.44, up from $4.24 in the same year-ago period. Management increased its 2021 operating EPS guidance to $4.55-$4.75 from $4.51-$4.71. It also reaffirmed its long-term 5%-7% growth target off the updated 2021 guidance range. Our expectations are for management to achieve the midpoint of this range off 2020 earnings, which were slightly higher than our expectations, through 2024. This growth rate is in line with the median U.S. utility growth rate. Our narrow moat and stable moat trend are unchanged.