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American Electric Power Co Inc AEP

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Morningstar’s Analysis

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AEP Proposes Large Renewable Energy Investment; Shares Fairly Valued After March-April Rally

Andrew Bischof, CFA, CPA Senior Equity Analyst

Analyst Note

| Andrew Bischof, CFA, CPA |

We're reaffirming our $89 per-share fair value estimate after American Electric Power, or AEP, reported first-quarter operating earnings of $1.15 per share, up from $1.02 in the same year-ago period. Management reaffirmed its 2021 operating earnings guidance range to $4.55 to $4.75 and long-term 5% to 7% growth rate. We forecast AEP's full-year earnings will be near the midpoint of this range. After trading in deep 4-star territory, AEP now trades in line with our fair value estimate. We continue to view AEP as an attractive long-term holding.

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Company Profile

Business Description

American Electric Power is one of the largest regulated utilities in the United States, providing electricity generation, transmission, and distribution to more than 5 million retail customers in 11 states. About 43% of AEP's of capacity is coal, with the remainder from a mix of natural gas (29%), renewable energy and hydro (18%), nuclear (8%), and demand response (2%). Vertically integrated utilities, transmission and distribution, and generation and marketing support earnings.

1 Riverside Plaza
Columbus, OH, 43215-2373
T +1 614 716-1000
Sector Utilities
Industry Utilities - Regulated Electric
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 16,787