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American Electric Power Co Inc AEP

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Morningstar’s Analysis

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AEP Increases Carbon Emission Reduction Goal and Renewable Additions, Raises 2021 Guidance

Andrew Bischof, CFA, CPA Senior Equity Analyst

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. 

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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 utilities, competitive transmission, and unregulated 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 Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 16,787