American Electric Power stock price target raised by BMO Capital to $127

Investing.com - BMO Capital has raised its price target on American Electric Power (NASDAQ:AEP) to $127.00 from $121.00 while maintaining an Outperform rating on the stock. The utility giant, currently trading near its 52-week high of $119.40 with a market capitalization of $63.39 billion, has delivered an impressive 31.95% return year-to-date.

The price target adjustment comes ahead of American Electric Power’s third-quarter 2025 earnings report, scheduled for October 29. BMO Capital projects third-quarter earnings per share of $1.78, which falls below the current FactSet median estimate of $1.83 and Bloomberg median estimate of $1.86. According to InvestingPro data, six analysts have recently revised their earnings estimates downward for the upcoming period.

BMO Capital notes that American Electric Power will update its five-year financial plan before the Edison Electric Institute (EEI) conference. The company, which maintains a solid dividend yield of 3.14% and has raised dividends for 15 consecutive years, had previously previewed this update during its second-quarter 2025 earnings call, indicating an anticipated capital program of approximately $70 billion or more, representing a 30% increase compared to the current plan. For deeper insights into AEP’s financial health and growth prospects, investors can access comprehensive analysis through InvestingPro’s detailed research reports.

The research firm highlights several key factors that will influence potential rerating of the stock, including the investment shape and asset mix, associated financing strategy, and net impact on the company’s previously stated long-term earnings per share compound annual growth rate of 6-8%.

According to BMO Capital, American Electric Power is expected to finance approximately 30-40% of its incremental capital expenditures with equity.

In other recent news, American Electric Power has announced a $2 billion subordinated debenture offering, with the sale finalized through an underwriting agreement involving major financial institutions like BofA Securities and Goldman Sachs. Additionally, AEP Texas has disclosed a $900 million senior notes offering, with maturities set for 2034 and 2055, in collaboration with firms such as BMO Capital Markets and RBC Capital Markets. UBS has raised its price target for American Electric Power to $116, maintaining a Sell rating, and highlighted the company’s planned increase in capital expenditures to $70 billion over the next five years. Meanwhile, Evercore ISI initiated coverage on American Electric Power with an Outperform rating and a price target of $133, citing potential benefits from data center and large load developments in key markets. In contrast, Mizuho has lowered its price target for the company to $113, maintaining a Neutral rating, pointing to the need for continued regulatory execution. These developments represent a mix of strategic financial maneuvers and varied analyst perspectives on American Electric Power’s future performance.

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