AEP Stock Forecast & Price Target

American Electric Power (AEP) has secured customer agreements for 24GW of new load by 2030, demonstrating robust demand trends, particularly from commercial and industrial clients, which will significantly bolster future earnings. The company is poised for impressive earnings per share (EPS) growth, now forecasted at approximately 7.25%, suggesting positive financial momentum that surpasses previous estimates. Furthermore, a pending $16 billion increase in the capital expenditure (capex) plan, potentially raising the total to $70 billion, indicates a strong commitment to infrastructure development and growth, enhancing AEP's long-term value proposition.

American Electric Power faces a negative outlook primarily due to potential environmental regulations that may accelerate coal retirements, leading to unplanned capital expenditures and increased costs for replacement energy sources, thereby stranding assets. Additionally, the company's failure to meet load demands or delays in project development could result in underutilized infrastructure and under-recovered investments, further impacting financial stability. Compounding these challenges, the current TTM FFO/debt metric of 13.2% is below the targeted range of 14%-15%, indicating increased financial vulnerability amidst rising interest rates and tighter credit markets.