Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - BofA Securities has reduced its price target on American Electric Power (NASDAQ:AEP) to $114.00 from $117.00 while maintaining a Buy rating on the stock. Currently trading at $105.49, AEP demonstrates remarkable stability with a beta of 0.4, and according to InvestingPro analysis, the stock generally trades with low price volatility.
The adjustment comes as BofA updates its second-quarter 2025 earnings per share estimate for AEP to $1.28, compared to the consensus estimate of $1.21 and the second-quarter 2024 EPS of $1.25.
BofA’s primary concern centers on realized retail load growth following underperformance against guidance in the first quarter of 2025, with particular focus on residential volumes that declined 1.8% in Q1 2025 versus the annual guidance of a 0.7% increase.
The firm noted that while investor conversations have concentrated on commercial volumes due to the gap between realized (12.3%) and annual guidance (24%), residential volumes carry higher attached margins and therefore warrant closer attention.
BofA expressed less concern about commercial volumes, stating that management has communicated that take-or-pay commercial volumes will ramp up in the second half of 2025 regardless of realized load.
In other recent news, American Electric Power (AEP) reported strong financial results for the first quarter of 2025, with earnings per share (EPS) of $1.54, surpassing the forecast of $1.41. However, the company experienced a revenue shortfall, reporting $5.46 billion against an expected $5.59 billion. S&P Global Ratings revised AEP’s outlook to stable from negative, citing improvements in financial performance and a constructive rate order in Oklahoma. AEP also secured $425 million in senior notes through a recent offering by AEP Transmission Company, facilitated by several financial firms. Additionally, AEP announced leadership changes, appointing Rob Berntsen as executive vice president and general counsel, and Johannes Eckert as executive vice president and chief information and technology officer. The company reaffirmed its 2025 earnings guidance of $5.75 to $5.95 per share, supported by a $54 billion capital investment plan over the next five years. AEP is also benefiting from recently enacted legislation in Ohio, which is expected to enhance financial performance by allowing more timely rate recovery.
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