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Investing.com - Jefferies has raised its price target on American Electric Power (NASDAQ:AEP) to $120.00 from $114.00 while maintaining a Hold rating on the stock. The utility giant, with a market capitalization of $61.56 billion, is trading near its 52-week high after delivering a strong 25.41% year-to-date return.
The firm cited AEP’s $70 billion capital expenditure plan for 2026-2030 and its unique 765 kV transmission capabilities as key factors positioning the company for the AI-driven electrification wave. According to InvestingPro analysis, the stock currently trades at a P/E ratio of 16.78x, with technical indicators suggesting overbought conditions.
Jefferies also noted AEP’s improving earned ROE trajectory, which has increased to 9.3% from 8.8% two years ago, as a positive development for the utility company. This improvement is reflected in AEP’s overall Financial Health Score of "GOOD" on InvestingPro, which offers additional insights through its comprehensive Pro Research Report.
Despite projecting above-consensus growth with a 7.5% EPS CAGR compared to the Street’s 7.3%, Jefferies maintained its Hold rating, pointing to execution complexity that continues to face the company.
The research firm indicated that management’s conservative approach and ongoing balance sheet repair efforts may limit AEP’s ability to achieve a significant step up in performance.
In other recent news, American Electric Power reported strong second-quarter earnings, with an earnings per share (EPS) of $1.43, surpassing the consensus estimate of $1.27. Revenue also exceeded expectations, reaching $5.09 billion compared to the forecast of $4.9 billion. These results have led to increased investor confidence. Analysts have taken note, with Mizuho (NYSE:MFG) maintaining a Neutral rating but raising its price target for the company from $109 to $116. BMO Capital also raised its price target from $118 to $121 while maintaining an Outperform rating. The company’s announcement of a 30% increase to $70 billion in its five-year plan has further captured investor attention. These developments reflect the company’s robust financial performance and strategic growth plans.
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