American Electric Power Company, Inc. (AEP), based in Columbus, Ohio, is a prominent utility company focused on the generation, transmission, and distribution of electricity, valued at a market capitalization of $51 billion.
Companies worth $10 billion or more are generally considered "large-cap" stocks, and American Electric Power exemplifies this category with its substantial size, stability, and influence in the utility sector. AEP's market leadership stems from its robust infrastructure for electricity generation, transmission, and distribution. Its diversified energy portfolio, including renewable energy initiatives, supports long-term growth in a changing energy landscape. AEP's emphasis on innovation and technology drives operational efficiency and enhances customer service.
Shares of AEP have dropped 9.1% from their 52-week high of $105.18, which they reached on Sept. 16. Over the past three months, AEP's shares have declined 7.8%, marginally underperforming the Utilities Select Sector SPDR Fund (XLU), which has gained 2.6% over the same time frame.
In the longer term, AEP is up 17.7% on a YTD basis, and the shares have gained 20% over the past 52 weeks. In comparison, the XLU is up 24.2% in 2024 and 24.1% over the past year.
AEP has been trading above its 200-day moving average since mid-April. However, the stock has been trading under its 50-day moving average since the end of November.
On Nov. 6, AEP reported better-than-expected Q3 results with an adjusted EPS of $1.85 and revenue of $5.4 billion. But, its shares dropped 4.1% as the company issued narrower 2024 EPS guidance of $5.58 - $5.68, which raised concerns about limited growth potential and missed expectations.
AEP’s top rival, CMS Energy Corporation (CMS), is underperforming, with shares up 16.3% over the past year and a 16.5% rise in 2024.
The stock has a consensus rating of "Moderate Buy" from 20 analysts in coverage. The mean price target of $102.17 reflects a 6.9% premium over current price levels.
