American Electric Power Company, Inc. (AEP), headquartered in Columbus, Ohio, generates, transmits, and distributes electricity for sale to retail and wholesale customers. Valued at $47.94 billion by market cap, the company serves nearly 5.6 million customers in 11 states and produces about 29,000 MW of diverse generating capacity, with more than 6,000 MW of renewable energy. The leading electric utility is expected to announce its fiscal second-quarter earnings for 2024 before the market opens on Tuesday, Jul. 30.
Ahead of the event, analysts expect AEP to report a profit of $1.25 per share on a diluted basis, up 10.6% from $1.13 per share in the year-ago quarter. The company missed the consensus estimates in three of the last four quarters while beating the forecast on another occasion. During the previous quarter, AEP completed the sale of its 50% interest in New Mexico Renewable Development, LLC (NMRD) to Exus North America Holdings, LLC (Exus).
For fiscal 2024, analysts expect AEP to report EPS of $5.58, up 6.3% from $5.25 in fiscal 2023.
AEP stock has underperformed the S&P 500’s ($SPX) 18.1% gains on a YTD basis, with shares up 12% during this period. However, it outshined the S&P 500 Utilities Sector SPDR’s (XLU) 9.8% gains over the same time frame.
AEP’s overall performance can be attributed to its robust Q1 results, promising full-year guidance, and growing demand for electricity from manufacturing facilities and data centers driven by AI and other technologies. On Apr. 30, AEP reported its Q1 results, with its adjusted EPS coming in at $1.27, falling short of the consensus estimates of $1.30. The company’s revenue came in at $5 billion. AEP reaffirmed its full-year non-GAAP EPS to be between $5.53 and $5.73 and a long-term growth rate of 6% to 7%.
AEP plans to add 20 GW of new resource opportunities between 2024 and 2033. During an earnings call, Ben Fowke, AEP’s interim President, CEO, and director, said that companies representing up to 15 GW of load were looking for service from its utilities, and there was scope for the addition of more gigawatts stemming from hundreds of inquiries from potential customers. AEP shares closed down marginally on the day the results were released but have been on an uptrend since then.
Analysts’ consensus opinion on AEP stock is bullish, with a “Moderate Buy” rating overall. Out of 18 analysts covering the stock, six advise a “Strong Buy” rating, one has a “Moderate Buy” rating, ten recommend a “Hold” rating, and one gives a “Strong Sell.” The average analyst price target for AEP is $90.12, indicating a marginal potential downside from the current levels.
On the date of publication, Dipanjan Banchur 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.
