American Electric Power (AEP)
Market Price (10/1/2026): $118.22 | Market Cap: $64.3 BilInvestor Relations Sector: Utilities | Industry: Electric Utilities
American Electric Power (AEP)
Market Price (10/1/2026): $118.22Market Cap: $64.3 BilSector: UtilitiesIndustry: Electric Utilities
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 8.0%, Dividend Yield is 3.2%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 4.2% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 34%, CFO LTM is 7.7 Bil Low stock price volatilityVol 12M is 19% Megatrend and thematic driversMegatrends include Renewable Energy Transition, and Smart Grids & Grid Modernization. Themes include Solar Energy Generation, Wind Energy Development, Show more. | Weak multi-year price returns2Y Excs Rtn is -8.3%, 3Y Excs Rtn is -8.4% | Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 82% Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -11% Key risksAEP key risks include [1] successfully executing and financing its massive $72 billion capital plan, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 8.0%, Dividend Yield is 3.2%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 4.2% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 34%, CFO LTM is 7.7 Bil |
| Low stock price volatilityVol 12M is 19% |
| Megatrend and thematic driversMegatrends include Renewable Energy Transition, and Smart Grids & Grid Modernization. Themes include Solar Energy Generation, Wind Energy Development, Show more. |
| Weak multi-year price returns2Y Excs Rtn is -8.3%, 3Y Excs Rtn is -8.4% |
| Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 82% |
| Not cash flow generativeFCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is -11% |
| Key risksAEP key risks include [1] successfully executing and financing its massive $72 billion capital plan, Show more. |
Qualitative Assessment
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American Electric Power (AEP) stock has lost about 15% since 6/30/2026 because of the following key factors:
1. American Electric Power (AEP) reported weaker-than-expected earnings for fiscal Q2 2026. On July 30, 2026, AEP announced operating earnings per share (EPS) of $1.36, which missed analysts' consensus estimates of $1.48 by $0.12. While quarterly revenue of $5.45 billion surpassed estimates, the earnings shortfall contributed to investor caution.
2. Rising interest rates negatively impacted the utility sector and increased AEP's borrowing costs. The Federal Reserve increased the federal funds target rate to 4.0% in September 2026, marking the first rate hike since July 2023. This macroeconomic trend generally makes dividend-paying utility stocks less attractive compared to higher-yielding fixed-income alternatives and increases the cost of financing for capital-intensive companies like AEP.
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American Electric Power (AEP) stock has lost about 15% since 6/30/2026 because of the following key factors:
1. American Electric Power (AEP) reported weaker-than-expected earnings for fiscal Q2 2026. On July 30, 2026, AEP announced operating earnings per share (EPS) of $1.36, which missed analysts' consensus estimates of $1.48 by $0.12. While quarterly revenue of $5.45 billion surpassed estimates, the earnings shortfall contributed to investor caution.
2. Rising interest rates negatively impacted the utility sector and increased AEP's borrowing costs. The Federal Reserve increased the federal funds target rate to 4.0% in September 2026, marking the first rate hike since July 2023. This macroeconomic trend generally makes dividend-paying utility stocks less attractive compared to higher-yielding fixed-income alternatives and increases the cost of financing for capital-intensive companies like AEP.
3. AEP experienced an increase in its debt levels. By the end of fiscal Q2 2026, AEP's long-term debt had climbed to approximately $48 billion, an increase from nearly $39 billion. This resulted in an elevated debt-to-total-capital ratio of 61.4%, which can be a concern for investors, particularly amidst a rising interest rate environment.
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Stock Movement Drivers
Fundamental Drivers
The -12.6% change in AEP stock from 6/30/2026 to 9/30/2026 was primarily driven by a -15.4% change in the company's Net Income Margin (%).| (LTM values as of) | 6302026 | 9302026 | Change |
|---|---|---|---|
| Stock Price ($) | 135.78 | 118.64 | -12.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 22,433 | 22,791 | 1.6% |
| Net Income Margin (%) | 16.3% | 13.8% | -15.4% |
| P/E Multiple | 20.1 | 20.6 | 2.0% |
| Shares Outstanding (Mil) | 542 | 544 | -0.4% |
| Cumulative Contribution | -12.6% |
Market Drivers
6/30/2026 to 9/30/2026| Return | Correlation | |
|---|---|---|
| AEP | -12.6% | |
| Market (SPY) | 2.1% | 4.1% |
| Sector (XLU) | -13.0% | 87.1% |
Fundamental Drivers
The -8.1% change in AEP stock from 3/31/2026 to 9/30/2026 was primarily driven by a -15.8% change in the company's Net Income Margin (%).| (LTM values as of) | 3312026 | 9302026 | Change |
|---|---|---|---|
| Stock Price ($) | 129.15 | 118.64 | -8.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 21,876 | 22,791 | 4.2% |
| Net Income Margin (%) | 16.4% | 13.8% | -15.8% |
| P/E Multiple | 19.3 | 20.6 | 6.4% |
| Shares Outstanding (Mil) | 536 | 544 | -1.6% |
| Cumulative Contribution | -8.1% |
Market Drivers
3/31/2026 to 9/30/2026| Return | Correlation | |
|---|---|---|
| AEP | -8.1% | |
| Market (SPY) | 17.6% | -4.2% |
| Sector (XLU) | -13.5% | 85.0% |
Fundamental Drivers
The 8.7% change in AEP stock from 9/30/2025 to 9/30/2026 was primarily driven by a 28.7% change in the company's P/E Multiple.| (LTM values as of) | 9302025 | 9302026 | Change |
|---|---|---|---|
| Stock Price ($) | 109.11 | 118.64 | 8.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 20,666 | 22,791 | 10.3% |
| Net Income Margin (%) | 17.7% | 13.8% | -22.0% |
| P/E Multiple | 16.0 | 20.6 | 28.7% |
| Shares Outstanding (Mil) | 534 | 544 | -1.8% |
| Cumulative Contribution | 8.7% |
Market Drivers
9/30/2025 to 9/30/2026| Return | Correlation | |
|---|---|---|
| AEP | 8.7% | |
| Market (SPY) | 15.4% | -1.8% |
| Sector (XLU) | -7.6% | 78.1% |
Fundamental Drivers
The 75.7% change in AEP stock from 9/30/2023 to 9/30/2026 was primarily driven by a 35.1% change in the company's Net Income Margin (%).| (LTM values as of) | 9302023 | 9302026 | Change |
|---|---|---|---|
| Stock Price ($) | 67.51 | 118.64 | 75.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 19,471 | 22,791 | 17.1% |
| Net Income Margin (%) | 10.2% | 13.8% | 35.1% |
| P/E Multiple | 17.5 | 20.6 | 17.5% |
| Shares Outstanding (Mil) | 515 | 544 | -5.4% |
| Cumulative Contribution | 75.7% |
Market Drivers
9/30/2023 to 9/30/2026| Return | Correlation | |
|---|---|---|
| AEP | 75.7% | |
| Market (SPY) | 84.5% | 5.2% |
| Sector (XLU) | 45.3% | 73.9% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| AEP Return | 11% | 10% | -11% | 18% | 29% | 6% | 76% |
| Peers Return | 17% | 15% | 5% | 34% | 25% | -4% | 127% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 12% | 104% |
Monthly Win Rates [3] | |||||||
| AEP Win Rate | 50% | 67% | 58% | 58% | 67% | 44% | |
| Peers Win Rate | 56% | 61% | 58% | 58% | 63% | 44% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 44% | |
Max Drawdowns [4] | |||||||
| AEP Max Drawdown | -11% | -22% | -25% | -13% | -9% | -15% | |
| Peers Max Drawdown | -10% | -24% | -18% | -15% | -19% | -19% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: LNT, CEG, SO, DUK, AEP. See AEP Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 9/30/2026 (YTD)
How Low Can It Go
| Event | AEP | S&P 500 |
|---|---|---|
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -17.7% | -9.5% |
| % Gain to Breakeven | 21.5% | 10.5% |
| Time to Breakeven | 147 days | 24 days |
| 2020 COVID-19 Crash | ||
| % Loss | -32.4% | -33.7% |
| % Gain to Breakeven | 47.9% | 50.9% |
| Time to Breakeven | 714 days | 140 days |
| 2016-2017 Trump Reflation Bond Selloff | ||
| % Loss | -10.2% | -3.7% |
| % Gain to Breakeven | 11.3% | 3.9% |
| Time to Breakeven | 82 days | 6 days |
| 2013 Taper Tantrum | ||
| % Loss | -16.5% | -0.2% |
| % Gain to Breakeven | 19.7% | 0.2% |
| Time to Breakeven | 154 days | 1 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -46.0% | -53.4% |
| % Gain to Breakeven | 85.1% | 114.4% |
| Time to Breakeven | 962 days | 1085 days |
In The Past
American Electric Power's stock fell -3.5% during the 2025 US Tariff Shock. Such a loss loss requires a 3.6% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
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| Event | AEP | S&P 500 |
|---|---|---|
| 2020 COVID-19 Crash | ||
| % Loss | -32.4% | -33.7% |
| % Gain to Breakeven | 47.9% | 50.9% |
| Time to Breakeven | 714 days | 140 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -46.0% | -53.4% |
| % Gain to Breakeven | 85.1% | 114.4% |
| Time to Breakeven | 962 days | 1085 days |
In The Past
American Electric Power's stock fell -3.5% during the 2025 US Tariff Shock. Such a loss loss requires a 3.6% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About American Electric Power (AEP)
American Electric Power (AEP) is a major electric public utility holding company that operates across the United States. Its core business involves the full spectrum of electricity delivery: generating power from a diverse mix of sources including coal, natural gas, nuclear, hydro, solar, and wind, as well as transmitting and distributing that electricity through its extensive network.
The company's primary service is providing electricity. AEP serves a broad customer base, selling electricity directly to retail customers in various states and also supplying and marketing electric power at wholesale. Its wholesale customers include other electric utility companies, rural electric cooperatives, municipalities, and other market participants, fulfilling their power needs across different regions.
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Here are a few brief analogies for American Electric Power (AEP):
- The AT&T of electricity
- Shell or BP for electricity
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- Retail Electricity Services: Providing electricity through generation, transmission, and distribution directly to residential and commercial customers.
- Wholesale Electric Power Sales: Supplying and marketing electric power in bulk to other utility companies, rural electric cooperatives, municipalities, and other market participants.
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American Electric Power (AEP) operates as an electric public utility, serving a broad base of customers. While it engages in both retail and wholesale activities, its primary focus in terms of direct customer accounts and service responsibility is directed towards end-users within its regulated service territories. Therefore, its major customers can be categorized as follows:
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Residential Customers: This category includes individual households and families who purchase electricity for personal use in their homes.
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Commercial Customers: Comprising various businesses such as offices, retail establishments, restaurants, and other non-industrial enterprises that consume electricity for their operations.
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Industrial Customers: This segment consists of large-scale industrial facilities, manufacturing plants, and other major operations that require substantial amounts of electricity.
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William J. Fehrman, Chairman of the Board of Directors, President and Chief Executive Officer
William J. Fehrman assumed the role of President and Chief Executive Officer of American Electric Power effective August 1, 2024. Prior to joining AEP, Mr. Fehrman served as president and CEO of Centuri Holdings Inc., where he was instrumental in launching it as a public company. From 2018 to 2023, he held the positions of president, CEO, and director at Berkshire Hathaway Energy (BHE), a subsidiary of Berkshire Hathaway. His career also includes leadership as president and CEO of MidAmerican Energy Company, PacifiCorp Energy, and Nebraska Public Power District.
Trevor I. Mihalik, Executive Vice President and Chief Financial Officer
Trevor I. Mihalik was appointed Executive Vice President and Chief Financial Officer of American Electric Power, effective January 20, 2025, succeeding Charles Zebula. Mr. Mihalik brings over three decades of experience in the energy sector. Most recently, he served as group president at Sempra, a utility holding company, and held various leadership roles in Sempra's finance organization for more than 12 years. Prior to Sempra, he led the finance teams for Iberdrola Renewables Holdings, Chevron Natural Gas, and Bridgeline Holdings.
Therace Risch, Executive Vice President and Chief Information & Technology Officer
Therace Risch is the Executive Vice President and Chief Information & Technology Officer at AEP, a position she has held since joining the company in May 2020. In this role, she is responsible for enterprise-wide technology strategy, execution, and operations, including IT infrastructure, cyber, and telecommunications, as well as innovation, physical security, and aviation. Before her tenure at AEP, Ms. Risch was executive vice president and Chief Information Officer for JCPenney, where she oversaw IT systems and played a key role in the company's stabilization and turnaround efforts. Her experience also includes serving as executive vice president and Chief Information Officer at COUNTRY Financial and 10 years in various technology leadership roles at Target Corp.
David M. Feinberg, Executive Vice President, General Counsel and Secretary
David M. Feinberg serves as Executive Vice President, General Counsel and Secretary for American Electric Power, responsible for all corporate legal affairs. He joined AEP in May 2011 as senior vice president and general counsel of AEP Service Corp. Previously, he was vice president, general counsel, and corporate secretary of Allegheny Energy, Inc. His earlier career also includes serving as senior litigation counsel and deputy general counsel at Allegheny Energy and as a partner at the law firm Jenner & Block, specializing in complex commercial litigation.
Phil Ulrich, Executive Vice President and Chief Human Resources Officer
Phil Ulrich is the Executive Vice President and Chief Human Resources Officer at American Electric Power.
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- Regulatory Friction and Capital Recovery: As a regulated utility, American Electric Power's financial health and its ability to execute its substantial capital investment plans, including a projected $72 billion over five years, heavily depend on timely approval from state and federal regulators for cost recovery and a fair return. Delays in rate cases or unfavorable regulatory decisions can significantly hinder the company's financial performance and its capacity to finance grid modernization and respond to increased demand from large commercial customers like data centers. This regulatory uncertainty is identified as a primary risk, particularly in regions like Ohio.
- Financial Market Volatility and Funding of Capital Investments: American Electric Power's capital-intensive business model requires continuous and substantial investments in infrastructure. The company's ability to fund these significant capital expenditures and refinance maturing debt is susceptible to volatility in financial markets, including increased interest rates and reduced liquidity. Restricted access to capital or higher borrowing costs could negatively impact its financial condition, cash flows, and ability to implement its strategic growth plans.
- Transition to Clean Energy and Dependence on Coal: Despite a diversified energy portfolio, American Electric Power has a notable reliance on coal for generation, with coal representing 42% of its capacity as of early 2026. This dependence exposes the company to risks associated with the accelerating shift towards cleaner energy sources, potential carbon taxation, and increasingly stringent environmental regulations. The ongoing costs of operating older fossil fuel units and the physical risks stemming from climate change, such as more severe weather events impacting infrastructure, further contribute to this significant business risk.
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American Electric Power (AEP) primarily operates in the generation, transmission, and distribution of electricity for retail and wholesale customers in the United States.
Addressable Markets for Main Products or Services (U.S.)
The addressable market for American Electric Power's main products and services encompasses the overall U.S. electricity sector, given its extensive operations as one of the largest electric utility companies in the country.
- Total U.S. Electricity Market Revenue: In 2023, the U.S. electricity industry earned approximately $491 billion in revenue.
- Total U.S. Electricity Generation: The United States generated approximately 4,178 billion kilowatt-hours (kWh) (or 4.178 Terawatt-hours) of electricity in 2023.
- Total U.S. Retail Electricity Sales: U.S. retail electricity sales to end-use customers were about 3,861 billion kWh in 2023, and approximately 4.10 trillion kWh (4,100 billion kWh) in 2024.
American Electric Power serves over 5 million customers across an 11-state territory, covering approximately 197,500 square miles, primarily through its regulated utility operations. Its operations include a significant electricity transmission system, which is one of the largest in the United States.
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American Electric Power (AEP) is poised for future revenue growth over the next two to three years, driven by substantial capital investments, unprecedented customer demand, and a strategic focus on renewable energy and grid modernization.
Here are 3-5 expected drivers of future revenue growth:
- Significant Capital Investment Plan and Rate Base Growth: AEP has outlined an ambitious $72 billion five-year capital plan for 2026-2030, which is a substantial increase from previous plans. This investment is primarily directed towards enhancing its electricity generation, transmission, and distribution infrastructure. These capital expenditures are expected to drive a 10% compounded annual growth rate (CAGR) in the company's rate base through 2030. As a regulated utility, AEP earns a regulated return on its rate base, meaning these infrastructure investments are a direct driver of future revenue.
- Unprecedented Load Growth, Particularly from Data Centers and Industrial Customers: The company is experiencing a significant surge in demand from large-load commercial and industrial customers, with data centers being a primary catalyst. AEP has doubled its outlook for incremental contracted load growth to 56 gigawatts (GW) by 2030, all supported by signed customer agreements. This robust demand growth, observed across key service territories, fuels the need for AEP's extensive capital investment plan and contributes directly to higher electricity sales.
- Expansion of Renewable Energy Generation Portfolio: AEP is strategically investing in and expanding its renewable energy generation portfolio, including solar and wind projects. The company plans to allocate approximately $8 billion to regulated renewable projects between 2026 and 2030. This initiative aims to meet evolving customer demands, support sustainability goals, and diversify AEP's energy mix, with a target of 50% renewable generation by 2030. These new clean energy assets will contribute to revenue through their inclusion in the rate base and subsequent regulated returns.
- Transmission and Distribution System Modernization: A significant portion of AEP's capital plan, approximately $30 billion, is dedicated to modernizing and expanding its transmission and distribution networks. These investments are crucial for enhancing grid reliability, integrating new generation sources, and efficiently serving the rapidly increasing customer demand, especially from large industrial loads. The expansion and upgrades to this critical infrastructure will contribute to rate base growth and allow for improved service delivery, which can translate into approved rate increases.
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Share Repurchases
- American Electric Power (AEP) has not made significant share repurchases in the last 3-5 years, with reports indicating $0.00 in share buybacks over the last four quarters and four years up to September 2025.
Share Issuance
- In March 2025, AEP announced a registered underwritten offering of $2.0 billion of its common stock, with an option for underwriters to purchase an additional $300 million.
- During the first quarter of 2025, the company completed a $2.3 billion forward equity issuance.
- These issuances were part of the company's strategy to de-risk its financing plan for capital investments.
Inbound Investments
- In June 2025, KKR and PSP Investments jointly invested $2.82 billion for a 19.9% equity interest in AEP's Ohio and Indiana Michigan transmission companies.
- In late 2025, AEP secured a $1.6 billion federal loan guarantee from the U.S. Department of Energy. This funding is designated for upgrading transmission lines to enhance grid capacity for data centers and AI manufacturing.
Capital Expenditures
- From 2021 through 2025, AEP planned to invest $37 billion, with significant allocations including $26.7 billion for transmission and distribution operations and $2.8 billion for regulated renewable generation.
- AEP outlined a $54 billion capital investment plan for 2025-2029, with 100% allocated to regulated businesses. This plan earmarks 63% ($34 billion) for transmission and distribution ("wires") and 26% ($14 billion) for regulated new generation, including renewables.
- In late 2025, the company's five-year capital plan was further expanded to $72 billion, a 33% increase from the previous plan, driven by significant load growth from data centers and other large customer agreements, with over $7 billion allocated to solar, wind, and storage.
Peer Outperformance in Electric Utilities
| Ticker | Name | Rev Growth 3Y Avg | P/E | 1Y | 3Y | 5Y | 5Y Gap |
|---|---|---|---|---|---|---|---|
| AEP | American Electric Power | 5.5% | 20.6x | 8.7% | 75.7% | 74.5% | — |
| VST | Vistra | 6.7% | 21.0x | -29.0% | 327.8% | 794.7% | +720pp |
| Industry | Names | 1Y med | 3Y med | 5Y med | Top 3 by 5Y |
|---|---|---|---|---|---|
| Independent Power Producers & Energy Traders | 6 | -27.8% | 46.5% | 96.6% | HNRG 364% · OKLO 276% · NRG 168% |
| Electric Utilities ← | 24 | -1.6% | 43.6% | 40.1% | VST 795% · GNE 179% · ETR 140% |
| Multi-Utilities | 18 | -2.0% | 43.8% | 39.5% | MDU 90% · NI 89% · OGE 70% |
| Gas Utilities | 10 | -2.7% | 44.9% | 37.3% | ATO 99% · NJR 71% · NFG 64% |
| Water Utilities | 11 | 1.8% | 5.6% | -12.0% | CWCO 163% · AWR 7% · HTO 7% |
| Renewable Electricity | 5 | -51.0% | -69.1% | -95.3% | ORA 40% · CWEN 26% · AGIG -95% |
Latest Trefis Analyses
| Title | |
|---|---|
| ARTICLES |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 113.65 |
| Mkt Cap | 88.5 |
| Rev LTM | 30,178 |
| Op Inc LTM | 5,340 |
| FCF LTM | -2,437 |
| FCF 3Y Avg | -1,953 |
| CFO LTM | 7,694 |
| CFO 3Y Avg | 6,766 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 6.8% |
| Rev Chg 3Y Avg | 4.6% |
| Rev Chg Q | 1.1% |
| QoQ Delta Rev Chg LTM | 0.3% |
| Op Inc Chg LTM | 4.1% |
| Op Inc Chg 3Y Avg | 15.2% |
| Op Mgn LTM | 23.4% |
| Op Mgn 3Y Avg | 23.0% |
| QoQ Delta Op Mgn LTM | -0.9% |
| CFO/Rev LTM | 33.8% |
| CFO/Rev 3Y Avg | 32.2% |
| FCF/Rev LTM | -10.7% |
| FCF/Rev 3Y Avg | -6.0% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 88.5 |
| P/S | 3.0 |
| P/Op Inc | 12.9 |
| P/EBIT | 11.3 |
| P/E | 20.2 |
| P/CFO | 8.8 |
| Total Yield | 8.2% |
| Dividend Yield | 3.3% |
| FCF Yield 3Y Avg | -2.1% |
| D/E | 0.8 |
| Net D/E | 0.8 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -5.2% |
| 3M Rtn | -11.5% |
| 6M Rtn | -10.6% |
| 12M Rtn | -4.9% |
| 3Y Rtn | 44.6% |
| 1M Excs Rtn | -4.8% |
| 3M Excs Rtn | -13.8% |
| 6M Excs Rtn | -27.6% |
| 12M Excs Rtn | -19.0% |
| 3Y Excs Rtn | -39.2% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Vertically Integrated Utilities (VIU) | 12,819 | 11,597 | 11,450 | 11,478 | 9,998 |
| Transmission and Distribution Utilities (T&D) | 6,147 | 5,908 | 5,713 | 5,512 | 4,493 |
| Generation & Marketing (G&M) | 2,762 | 2,045 | 1,632 | 2,467 | 2,164 |
| American Electric Power Transmission Holdco (AEPTHCo) | 2,377 | 1,951 | 1,729 | 1,677 | 1,526 |
| Corporate and Other | 144 | 183 | 168 | 110 | 72 |
| Reconciling Adjustments | -2,373 | -1,963 | -1,710 | -1,604 | -1,462 |
| Total | 21,876 | 19,721 | 18,982 | 19,640 | 16,792 |
| $ Mil | 2007 | 2002 | 2001 |
|---|---|---|---|
| Utility Operations | 2,205 | ||
| Energy Delivery | 970 | 986 | |
| Other | -549 | 278 | |
| Wholesale | 645 | 1,418 | |
| Total | 2,205 | 1,066 | 2,682 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Vertically Integrated Utilities (VIU) | 1,605 | 1,453 | 1,090 | 1,292 | 1,117 |
| American Electric Power Transmission Holdco (AEPTHCo) | 1,161 | 790 | 703 | 674 | 682 |
| Transmission and Distribution Utilities (T&D) | 816 | 726 | 699 | 596 | 543 |
| Generation & Marketing (G&M) | 287 | 289 | -26 | 284 | 210 |
| Reconciling Adjustments | 0 | 0 | 0 | 0 | 0 |
| Corporate and Other | -289 | -291 | -258 | -538 | -64 |
| Total | 3,580 | 2,967 | 2,208 | 2,307 | 2,488 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Vertically Integrated Utilities (VIU) | 61,778 | 54,997 | 51,802 | 49,762 | 46,974 |
| Transmission and Distribution Utilities (T&D) | 29,272 | 26,864 | 24,838 | 22,920 | 21,120 |
| American Electric Power Transmission Holdco (AEPTHCo) | 19,719 | 18,012 | 16,576 | 15,216 | 13,873 |
| Corporate and Other | 6,733 | 5,551 | 5,194 | 6,834 | 5,846 |
| Generation & Marketing (G&M) | 2,003 | 1,634 | 2,598 | 4,520 | 4,264 |
| Reconciling Adjustments | -5,045 | -3,980 | -4,325 | -5,783 | -4,409 |
| Total | 114,460 | 103,078 | 96,684 | 93,469 | 87,669 |
Price Behavior
| Market Price | $118.64 | |
| Market Cap ($ Bil) | 64.6 | |
| First Trading Date | 01/02/1970 | |
| Distance from 52W High | -13.8% | |
| 50 Days | 200 Days | |
| DMA Price | $124.17 | $125.58 |
| DMA Trend | indeterminate | down |
| Distance from DMA | -4.5% | -5.5% |
| 3M | 1YR | |
| Volatility | 17.3% | 18.9% |
| Downside Capture | 38.78 | -7.56 |
| Upside Capture | -32.22 | 3.50 |
| Correlation (SPY) | 3.6% | -1.4% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.51 | 0.29 | 0.06 | -0.06 | -0.02 | 0.07 |
| Up Beta | -0.25 | 0.20 | 0.04 | -0.09 | -0.12 | 0.02 |
| Down Beta | 0.29 | -0.27 | 0.47 | -0.04 | 0.02 | 0.01 |
| Up Capture | 49% | 13% | -29% | -11% | 4% | 6% |
| Bmk +ve Days | 6 | 16 | 27 | 66 | 132 | 424 |
| Stock +ve Days | 11 | 22 | 31 | 63 | 132 | 397 |
| Down Capture | 91% | 86% | 48% | 6% | -11% | 7% |
| Bmk -ve Days | 16 | 26 | 37 | 60 | 120 | 328 |
| Stock -ve Days | 11 | 20 | 33 | 63 | 119 | 351 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with AEP | |
|---|---|---|---|---|
| AEP | 11.5% | 19.1% | 0.43 | - |
| Sector ETF (XLU) | -7.5% | 15.3% | -0.72 | 77.6% |
| Equity (SPY) | 15.9% | 13.0% | 0.87 | -1.5% |
| Gold (GLD) | 8.1% | 29.6% | 0.26 | 5.4% |
| Commodities (DBC) | 43.1% | 20.8% | 1.61 | -6.8% |
| Real Estate (VNQ) | 2.2% | 13.6% | -0.09 | 36.8% |
| Bitcoin (BTCUSD) | -27.1% | 44.5% | -0.58 | -6.7% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with AEP | |
|---|---|---|---|---|
| AEP | 11.4% | 20.1% | 0.45 | - |
| Sector ETF (XLU) | 6.8% | 17.4% | 0.25 | 82.2% |
| Equity (SPY) | 13.2% | 17.2% | 0.59 | 24.3% |
| Gold (GLD) | 18.2% | 18.9% | 0.78 | 14.2% |
| Commodities (DBC) | 10.6% | 19.6% | 0.42 | 5.8% |
| Real Estate (VNQ) | 0.5% | 18.9% | -0.08 | 53.0% |
| Bitcoin (BTCUSD) | 13.9% | 52.3% | 0.44 | 2.4% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with AEP | |
|---|---|---|---|---|
| AEP | 10.0% | 21.0% | 0.42 | - |
| Sector ETF (XLU) | 8.0% | 19.2% | 0.35 | 85.9% |
| Equity (SPY) | 15.4% | 17.9% | 0.73 | 36.3% |
| Gold (GLD) | 11.8% | 16.4% | 0.58 | 13.5% |
| Commodities (DBC) | 8.4% | 18.1% | 0.38 | 6.3% |
| Real Estate (VNQ) | 4.5% | 20.7% | 0.18 | 57.6% |
| Bitcoin (BTCUSD) | 63.6% | 66.2% | 1.03 | 3.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Earnings Returns History
Updated 9/1/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 7/30/2026 | -1.3% | -2.3% | -4.4% |
| 5/5/2026 | 1.8% | -2.2% | -5.5% |
| 2/12/2026 | 3.4% | 5.0% | 9.3% |
| 10/29/2025 | 6.1% | 4.5% | 7.5% |
| 7/30/2025 | 3.7% | 3.7% | 4.2% |
| 5/6/2025 | 0.0% | -5.2% | -4.4% |
| 2/13/2025 | -1.3% | 2.0% | 3.1% |
| 11/6/2024 | -4.1% | -6.5% | -2.0% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 15 | 14 |
| # Negative | 10 | 9 | 10 |
| Median Positive | 2.1% | 2.2% | 6.9% |
| Median Negative | -1.1% | -2.9% | -5.0% |
| Max Positive | 6.1% | 7.8% | 13.9% |
| Max Negative | -4.1% | -6.5% | -9.1% |
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 7/30/2026 | -1.3% | -2.3% | -4.4% |
| 5/5/2026 | 1.8% | -2.2% | -5.5% |
| 2/12/2026 | 3.4% | 5.0% | 9.3% |
| 10/29/2025 | 6.1% | 4.5% | 7.5% |
| 7/30/2025 | 3.7% | 3.7% | 4.2% |
| 5/6/2025 | 0.0% | -5.2% | -4.4% |
| 2/13/2025 | -1.3% | 2.0% | 3.1% |
| 11/6/2024 | -4.1% | -6.5% | -2.0% |
| 7/30/2024 | 1.1% | 1.0% | 2.4% |
| 4/30/2024 | -0.7% | 2.5% | 1.9% |
| 2/26/2024 | 4.1% | 5.2% | 2.1% |
| 11/2/2023 | 3.6% | 2.2% | 6.5% |
| 7/27/2023 | -2.7% | -3.5% | -9.1% |
| 5/4/2023 | 0.6% | 1.9% | -7.3% |
| 2/23/2023 | -0.1% | -4.9% | -6.0% |
| 10/27/2022 | -0.3% | 0.9% | 10.2% |
| 7/27/2022 | -0.1% | 2.1% | 7.3% |
| 4/28/2022 | 2.9% | 1.2% | 3.9% |
| 2/24/2022 | 2.3% | 7.8% | 13.9% |
| 10/28/2021 | 0.5% | 0.7% | -1.2% |
| 7/22/2021 | 0.2% | 5.0% | 7.6% |
| 4/22/2021 | -1.6% | -2.9% | -2.6% |
| 2/25/2021 | -1.0% | -1.0% | 9.9% |
| 10/22/2020 | 2.0% | -0.1% | -8.0% |
| SUMMARY STATS | |||
| # Positive | 14 | 15 | 14 |
| # Negative | 10 | 9 | 10 |
| Median Positive | 2.1% | 2.2% | 6.9% |
| Median Negative | -1.1% | -2.9% | -5.0% |
| Max Positive | 6.1% | 7.8% | 13.9% |
| Max Negative | -4.1% | -6.5% | -9.1% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 07/30/2026 | 10-Q |
| 03/31/2026 | 05/05/2026 | 10-Q |
| 12/31/2025 | 02/12/2026 | 10-K |
| 09/30/2025 | 10/29/2025 | 10-Q |
| 06/30/2025 | 07/30/2025 | 10-Q |
| 03/31/2025 | 05/06/2025 | 10-Q |
| 12/31/2024 | 02/13/2025 | 10-K |
| 09/30/2024 | 11/06/2024 | 10-Q |
| 06/30/2024 | 07/30/2024 | 10-Q |
| 03/31/2024 | 04/30/2024 | 10-Q |
| 12/31/2023 | 02/26/2024 | 10-K |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 07/27/2023 | 10-Q |
| 03/31/2023 | 05/04/2023 | 10-Q |
| 12/31/2022 | 02/23/2023 | 10-K |
| 09/30/2022 | 10/27/2022 | 10-Q |
| Report Date | Filing Date | Filing |
|---|---|---|
| 06/30/2026 | 07/30/2026 | 10-Q |
| 03/31/2026 | 05/05/2026 | 10-Q |
| 12/31/2025 | 02/12/2026 | 10-K |
| 09/30/2025 | 10/29/2025 | 10-Q |
| 06/30/2025 | 07/30/2025 | 10-Q |
| 03/31/2025 | 05/06/2025 | 10-Q |
| 12/31/2024 | 02/13/2025 | 10-K |
| 09/30/2024 | 11/06/2024 | 10-Q |
| 06/30/2024 | 07/30/2024 | 10-Q |
| 03/31/2024 | 04/30/2024 | 10-Q |
| 12/31/2023 | 02/26/2024 | 10-K |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 07/27/2023 | 10-Q |
| 03/31/2023 | 05/04/2023 | 10-Q |
| 12/31/2022 | 02/23/2023 | 10-K |
| 09/30/2022 | 10/27/2022 | 10-Q |
| 06/30/2022 | 07/27/2022 | 10-Q |
| 03/31/2022 | 04/28/2022 | 10-Q |
| 12/31/2021 | 02/24/2022 | 10-K |
| 09/30/2021 | 10/28/2021 | 10-Q |
| 06/30/2021 | 07/22/2021 | 10-Q |
| 03/31/2021 | 04/22/2021 | 10-Q |
| 12/31/2020 | 02/25/2021 | 10-K |
| 09/30/2020 | 10/22/2020 | 10-Q |
| 06/30/2020 | 08/06/2020 | 10-Q |
| 03/31/2020 | 05/06/2020 | 10-Q |
| 12/31/2019 | 02/20/2020 | 10-K |
| 09/30/2019 | 10/24/2019 | 10-Q |
Recent Forward Guidance
Updated 7/31/2026Latest: Q2 2026 Earnings Reported 7/30/2026
| Forward Guidance | Guidance Change | |||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Source | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Operating EPS | Reported | 6.25 | 6.4 | 6.55 | 1.6% | Raised | Guidance: 6.3 for 2026 | |
| 2030 Operating Earnings Growth Rate | Reported | 7.0% | 8.0% | 9.0% | -1.0% | Affirmed | Guidance: 9.0% for 2030 | |
| 2030 Capital Investment Plan | Reported | 78.00 Bil | 0 | Affirmed | Guidance: 78.00 Bil for 2030 | |||
Prior: Q1 2026 Earnings Reported 5/5/2026
| Forward Guidance | Guidance Change | |||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Source | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Operating EPS | Reported | 6.15 | 6.3 | 6.45 | 0 | Affirmed | Guidance: 6.3 for 2026 | |
| 2030 Operating Earnings CAGR | Reported | 0.09 | ||||||
| 2030 Capital Plan | Reported | 78.00 Bil | 8.3% | Raised | Guidance: 72.00 Bil for 2026 | |||
| 2030 Annual Rate-Base Growth | Reported | 11.0% | ||||||
Q4 2025 Earnings Reported 2/12/2026
| Forward Guidance | Guidance Change | |||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Source | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2026 Operating Earnings | Reported | 6.15 | 6.3 | 6.45 | 0.0% | Affirmed | Guidance: 6.3 for 2026 | |
| 2026 Operating Earnings Growth Rate | Reported | 7.0% | 8.0% | 9.0% | ||||
| 2026 Capital Investment | Reported | 72.00 Bil | ||||||
| 2026 Incremental Investment Opportunities | Reported | 5.00 Bil | 6.50 Bil | 8.00 Bil | ||||
Q3 2025 Earnings Reported 10/29/2025
| Forward Guidance | Guidance Change | |||||||
|---|---|---|---|---|---|---|---|---|
| Metric | Source | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2025 Operating Earnings per Share | Reported | 5.75 | 5.85 | 5.95 | 0 | Affirmed | Guidance: 5.85 for 2025 | |
| 2026 Operating Earnings per Share | Reported | 6.15 | 6.3 | 6.45 | ||||
| 2030 Operating Earnings Growth Rate | Reported | 7.0% | 8.0% | 9.0% | ||||
| 2030 Rate Base Growth Rate | Reported | 10.0% | ||||||
| 2030 Capital Investment | Reported | 72.00 Bil | ||||||
Insider Activity
Updated 9/9/2026| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Dixon, Kate | Controller, CAO | Direct | Sell | 9092026 | 125.00 | 2,000 | 250,000 | 1,982,000 | Form |
| 2 | Ulrich, Phillip R | Executive Vice President | Direct | Sell | 3022026 | 132.08 | 4,106 | 542,320 | 5,582,097 | Form |
| 3 | Ferneau, Kelly J | Executive Vice President | Direct | Sell | 2252026 | 131.46 | 1,351 | 177,602 | 2,025,799 | Form |
| 4 | Fowke, Benjamin G S Iii | Direct | Sell | 12152025 | 115.07 | 5,000 | 575,350 | 2,980,083 | Form | |
| 5 | Fowke, Benjamin G S Iii | Direct | Sell | 11172025 | 121.58 | 5,000 | 607,900 | 3,756,579 | Form |
| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Dixon, Kate | Controller, CAO | Direct | Sell | 9092026 | 125.00 | 2,000 | 250,000 | 1,982,000 | Form |
| 2 | Ulrich, Phillip R | Executive Vice President | Direct | Sell | 3022026 | 132.08 | 4,106 | 542,320 | 5,582,097 | Form |
| 3 | Ferneau, Kelly J | Executive Vice President | Direct | Sell | 2252026 | 131.46 | 1,351 | 177,602 | 2,025,799 | Form |
| 4 | Fowke, Benjamin G S Iii | Direct | Sell | 12152025 | 115.07 | 5,000 | 575,350 | 2,980,083 | Form | |
| 5 | Fowke, Benjamin G S Iii | Direct | Sell | 11172025 | 121.58 | 5,000 | 607,900 | 3,756,579 | Form | |
| 6 | Fowke, Benjamin G S Iii | Direct | Sell | 10142025 | 117.52 | 5,000 | 587,600 | 4,218,733 | Form | |
| 7 | Ferneau, Kelly J | Executive Vice President | Direct | Sell | 10032025 | 112.00 | 1,006 | 112,672 | 635,712 | Form |
| 8 | Fowke, Benjamin G S Iii | Direct | Sell | 9152025 | 108.65 | 5,000 | 543,250 | 4,443,568 | Form |
Investor Activity (13F)
Updated Oct 1, 2026Active managers (13F portfolio over $250M, at least 3 holdings) with a position over $5M that is either over 10% of their portfolio or held in a concentrated book of 50 or fewer total positions. Index/ETF, sovereign, bank, community-bank and charitable/donor-advised filers are excluded.
AEP Trade Sentinel
Constructive
CONVICTION RATIONALE
AEP has secured an unprecedented 69 gigawatts of contracted, long-term demand from data centers, underpinning a $78 billion investment plan. This provides a clear path to a greater than 9% earnings growth rate through 2030. While funding this plan creates balance sheet pressure, management's strong execution and use of de-risking contracts provide confidence in the outlook.
STOCK ARCHETYPE
Regulated UtilityRevenue ≈ (Regulated Rate Base × Authorized Return on Equity) + Operating & Fuel Costs The spread between authorized and earned ROE, driven by operational efficiency and timely cost recovery through favorable regulatory mechanisms, and the sheer scale of rate base growth from the $78 billion capital plan.
INVESTMENT THESIS
AEP is capturing a generational electricity demand wave, with 69 GW of contracted load de-risking its growth.
- Contracted load additions expanded to 69 gigawatts through 2030.
- The five-year capital plan totals $78 billion.
- Management projects an operating EPS CAGR of greater than 9% through 2030.
- Company raised full-year 2026 operating earnings guidance to a midpoint of $6.40.
- New large load tariffs are approved in five states to improve cost recovery.
PRIMARY RISK
The $78 billion capital plan creates significant financial strain, with net debt at 5.68x EBITDA and free cash flow at negative $2.4 billion, risking shareholder value if execution or regulatory outcomes falter.
- Net debt is $52.9 billion, or 5.68 times trailing-twelve-month EBITDA.
- Trailing-twelve-month free cash flow is negative $2.4 billion.
- Interest coverage is low at 2.6 times.
- Basic share count increased 5.7% over the last three years.
| KPI | Status | Rationale |
|---|---|---|
| Contracted Load Additions | 69 gigawatts (GW) through 2030, as of the Q2 2026 earnings report. - Accelerating | The company has reported massive, sequential increases for four consecutive quarters, from 28 GW in Q3 2025 to 56 GW in Q4 2025, 63 GW in Q1 2026, and 69 GW in Q2 2026. This represents a historic acceleration in demand driven by data centers and industrial customers. |
| 5-Year Capital Investment Plan | $78 billion for the 2026-2030 period. - Accelerating | The capital plan saw a major step-up to $78 billion in Q1 2026 to support accelerating demand. Management has maintained this level while also flagging a line of sight to over $10 billion in additional investments not yet included in the plan. |
| Five-Year Capital Plan | $78 billion (2026 through 2030) | Represents the scale of planned investment in generation, transmission, and distribution infrastructure. The size and growth of this plan directly drive future rate base growth, which is the primary determinant of regulated earnings. |
| Regulated Earned ROE | 9.2% (Q2 2026) | Market rewards Management has a target to improve regulated earned ROE to 9.5% by 2030.. Measures the actual return on equity earned by the regulated businesses. Improvement in this metric, towards the authorized levels, indicates better cost recovery and operational efficiency, directly impacting profitability. |
Contracted Growth vs. Financial Strain
BULL VIEW
Bulls focus on the 69 GW of de-risked, contracted demand, which provides high visibility into a decade of above-average, regulated earnings growth supported by a proven management team.
CORE TENSION
Can the earnings power from the $78B capital plan overcome the financial risks of high debt, which stands at $52.9 billion?
PREVAILING SENTIMENT
The latest evidence favors the bulls. The contracted load backlog continues to grow, and management raised 2026 earnings guidance, signaling confidence in executing the plan profitably.
BEAR VIEW
Bears focus on the high leverage and negative free cash flow, arguing the massive capital spend will pressure the balance sheet and rely on perfect regulatory outcomes to be profitable.
| Timeline | Event & Metric To Watch |
|---|---|
the fourth quarter of 2026 | Mitchell Plant Investment Disallowance Watch: Final orders from the KPSC and WVPSC regarding the Mitchell Plant CPCN filings. |
11/4/2026 | Peer Commentary on Data Center Demand Watch: Peer management commentary on data center load growth, project pipelines, cancellations, or regulatory pushback. |
11/5/2026 | Peer Duke Energy Earnings Watch: Peer Duke Energy (DUK) is scheduled to report earnings. |
December 2026 | Wyoming Fuel Cell Milestone Watch: A milestone for the Wyoming fuel cell project, where the hyperscaler can choose an alternate deployment location. |
April 2027 | ERCOT Batch Zero Update Watch: ERCOT is expected to provide load ramp information to eligible projects in its Batch Zero interconnection process. |
No set date | ERCOT Batch Process Headwinds Watch: Announcements from ERCOT or the PUCT regarding the Batch Zero process, eligibility, or cost allocation. |
| Date | Event | Stock Impact |
|---|---|---|
2026-09-15 | Indiana Regulatory Order Issued Details: The Indiana Utility Regulatory Commission (IURC) issued an order in June 2026 approving Indiana Michigan Power's jurisdictional cost allocation modifications and a $53 million over-earnings customer credit. | -1.3% $122.23 -> $120.61 |
2026-07-30 | Q2 Earnings and Guidance Raise Details: | -1.2% $128.42 -> $126.88 |
2026-07-30 | Texas Unit Secures DOE Loan Details: AEP Texas secured a DOE loan for up to $3.3 billion to finance a portfolio of transmission projects, expected to deliver an estimated $685 million in customer savings. | -1.2% $128.42 -> $126.88 |
2026-07-21 | New Board Members Appointed Details: AEP elected David Marriott, Chairman of Marriott International, and Charles Meyers, former CEO of Equinix, to its Board, adding expertise in customer-focused operations and digital infrastructure. | +1.5% $130.06 -> $132.06 |
2026-05-05 | Q1 Earnings and Capex Increase Details: AEP reported its Q1 2026 operating earnings, increased its five-year capital plan to $78 billion, and announced new contracted load additions had expanded to 63 gigawatts. | -1.6% $132.68 -> $130.61 |
2026-03-20 | Ohio Infrastructure Plan Announced Details: AEP Ohio partnered with the U.S. Department of Energy and SB Energy to announce planned multi-billion-dollar investments in advanced digital and energy infrastructure in Appalachian Ohio. | -0.6% $126.83 -> $126.04 |
Position Sizing
5% - 7%
NORMAL POSITION
Sizing is volatility-based: AEP trades at roughly 20% annualized options-implied volatility versus about 13% for the S&P 500 (1.5x the market), around the 67th percentile of its own trailing year. A 5% - 7% position keeps a single-name swing of that size within a diversified portfolio's risk budget.
Diversification Alternatives
DUK - Duke Energy
Larger-Scale PeerDuke Energy offers greater scale with revenue 1.5 times that of AEP and a superior operating margin of 26.6%, suggesting potentially higher operational efficiency.
CEG - a business partner
Generation-Focused PlayConstellation provides direct exposure to power generation and wholesale markets, with revenue growth of 26% that is not tied to a regulated rate base model.
AEP is a regulated utility transforming into a primary infrastructure provider for the AI-driven data economy, with massive, contracted demand growth de-risking its multi-decade investment cycle.
AEP is capitalizing on a 'generational load growth phenomenon' driven by data centers and AI. The company is leveraging its dominant transmission network and regulated utility model to fund a $78 billion capital plan. This investment is substantially de-risked by 69 GW of contracted load additions, many with take-or-pay terms, which provides high visibility into a greater than 9% EPS CAGR through 2030.
Announcements of new large load contracts (ESAs/LOAs), continued constructive regulatory outcomes in rate cases, and successful execution of the capital plan on time and on budget.
Significant regulatory pushback on cost recovery for new investments, cancellation of major data center projects by key customers, or major project cost overruns and delays.
Short-term fluctuations in quarterly revenue due to weather or timing of regulatory filings, as the long-term thesis is based on the multi-year build-out of contracted infrastructure.
Repricing Catalyst
The market's increasing recognition of the magnitude and durability of AEP's contracted data center load growth, which underpins a long-term, high-visibility earnings growth trajectory that is superior to many utility peers.
Vertically Integrated Utilities (VIU)
$13.1B TTM (58% of Total)What It Is
This segment engages in the generation, transmission, and distribution of electricity for sale to retail and wholesale customers. It owns and operates generation assets and the associated delivery infrastructure.
Who Pays & How
Retail and wholesale customers within the service territories of subsidiaries like APCo, I&M, and SWEPCo pay for bundled electricity service. They pay because these subsidiaries are typically the sole provider of electricity in their franchised areas, and service is essential.
Competition
Transmission and Distribution Utilities (T&D)
$6.2B TTM (28% of Total)What It Is
This segment consists of the transmission and distribution of electricity for sale to retail and wholesale customers through assets owned by AEP Texas and OPCo. It does not include generation.
Who Pays & How
Retail customers in their service territories pay for the delivery of electricity. In Texas, AEP Texas provides services to Retail Electric Providers (REPs) who in turn serve the end customers. They pay for use of the essential transmission and distribution grid.
Competition
Generation & Marketing (G&M)
$3.0B TTM (13% of Total)What It Is
This segment focuses on a retail energy supply business (AEP Energy) providing electricity and natural gas to customers in competitive markets, and a wholesale energy trading and marketing business.
Who Pays & How
Residential, commercial, and industrial customers in seven states and Washington D.C. pay for competitive electricity and gas supply. Wholesale market participants pay for energy, capacity, and related products.
Competition
Industry Resources
| Utilities Resources |
| Data.gov Energy Infrastructure |
| Data.gov Energy Resources |
| Utility Dive |
| Electric Utilities Resources |
| T&D World |
| Edison Electric Institute (EEI) |
| Smart Energy International |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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