Overview#
BofA Securities has raised its price target for American Electric Power (AEP) from $122 to $133, while keeping a Neutral rating on the stock. Currently, AEP shares are trading at approximately $133.28, close to their 52-week high of $137.74, and have increased by 16.5% this year.
Earnings Expectations#
The firm anticipates that AEP will report operating earnings per share of $1.57 for the first quarter of 2026, slightly above the consensus estimate of $1.55. This figure aligns with the company’s projected earnings for the fiscal year 2026, which is set at a midpoint of $6.30. In comparison, AEP's reported earnings for the first quarter of 2025 were $1.54, which included a one-time benefit of $0.08. Currently, AEP has a price-to-earnings (P/E) ratio of 20.13 and offers a dividend yield of 2.85%, having increased its dividend for 16 consecutive years.
Segment Contributions#
The Vertically Integrated segment of AEP contributed an estimated $0.12 to $0.13 per share, driven by recent rate changes in various regions. The Transmission segment continues to be a reliable source of earnings, with management projecting transmission earnings per share of $3.34 for 2026, up from $3.18 in 2025. However, the company faces some challenges, including higher depreciation and interest expenses, as well as mixed weather conditions in early 2026.
Analyst Updates and Corporate Changes#
In addition to BofA's update, other analysts have also revised their ratings for AEP. Seaport Global Securities upgraded the stock to Buy, while Jefferies raised its price target to $152, maintaining a Buy rating. BMO Capital has increased its target to $141, expecting first-quarter 2026 earnings to be reported in May. Furthermore, AEP has appointed Maryam S. Brown as the new president and COO of Indiana Michigan Power, effective April 27. Additionally, AEP Ohio has announced a $4.2 billion transmission project to support a new data center campus in Piketon, Ohio, which aims to prevent rate increases for local residents.