American Electric Power Company, Inc. (AEP), with a market cap of $54.3 billion, is a leading utility company in the U.S. Based in Columbus, Ohio, the company generates, transmits, and distributes electricity and natural gas across multiple states.
Companies valued at $10 billion or more are generally considered "large-cap" stocks and American Electric Power fits this criterion perfectly. AEP is renowned for owning the largest electricity transmission system in the U.S., including 765-kilovolt ultra-high voltage lines, and is one of the nation's largest electricity generators with nearly 38,000 megawatts of generating capacity.
American Electric Power's stock, having reached a 52-week high of $104.41 on Sep. 10, has pulled back 1.3% since then. Despite this, the stock has surged 16.6% over the past three months, outperforming the broader Dow Jones Industrials Average's ($DOWI) 5.5% rise.
Over the longer term, AEP has gained 26.9% on a YTD basis, surpassing DOWI's 8.4% increase. Additionally, AEP’s shares have surged 32.5% over the past 52 weeks, compared to DOWI’s 17.9% returns during that period.
AEP has shown a bullish price trend, consistently trading above its 50-day and 200-day moving averages since February.
AEP has outperformed due to strong earnings driven by rate changes, increased demand from data centers, favorable weather conditions, and strategic investments in renewable energy and transmission infrastructure. Moreover, the stock rose 1.1% on Jul. 30 due to strong Q2 adjusted EPS of $1.25 that beat analysts' expectations, driven by increased commercial load from data centers. Additionally, AEP announced agreements to connect 15 gigawatts of new data center demand, signaling long-term growth prospects.
Also, AEP stock has outperformed its rival Duke Energy Corporation (DUK), with AEP boasting high double-digit gains on a YTD basis and over the past 52 weeks, compared to DUK's 26.6% rise in the past 52 weeks and 19.7% YTD gains.
Despite the stock's impressive gains, analysts are cautiously optimistic about its prospects. The stock has a consensus “Moderate Buy” rating overall from the 17 analysts covering the stock, and it is currently trading above the mean price target of $100.50.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
