With a market cap of $52 billion, American Electric Power Company, Inc. (AEP) is one of the largest integrated utilities in the United States, serving over 5.5 million customers across 11 states. AEP generates, transmits, and distributes electricity using a diverse energy mix, including coal, natural gas, renewables, nuclear, hydro, solar, and wind, catering to retail and wholesale markets. The Columbus, Ohio-based company is expected to unveil its fiscal Q4 earnings results before the market opens on Thursday, Feb. 13.
Before the event, analysts anticipate the utility company to report a profit of $1.24 per share, up marginally from $1.23 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in two of the past four quarters while missing on two other occasions. In the last reported quarter, AEP exceeded the consensus EPS estimate by a margin of 3.9%.
For fiscal 2024, analysts expect AEP to report EPS of $5.57, up 6.1% from $5.25 in fiscal 2023.
AEP's shares have risen 25.9% over the past 52 weeks, slightly outperforming both the S&P 500 Index's ($SPX) nearly 25% gain. But, the stock has lagged behind the Utilities Select Sector SPDR Fund's (XLU) 31.3% increase over the same period.
Despite reporting better-than-expected Q3 adjusted EPS of $1.85 and revenue of $5.4 billion, AEP's shares dipped 4.1% on Nov. 6 due to concerns over the narrowing of 2024 operating earnings guidance to $5.58 per share to $5.68 per share. Additionally, investors were cautious about the reduced contributions from the Generation & Marketing segment and the lower-than-anticipated growth rates in commercial load. Uncertainty regarding regulatory approval for cost allocations and potential impacts on customer rates also contributed to the decline in share value. Furthermore, the company announced a significant increase in its capital expenditure plan to $54 billion, a 25% jump from the previous plan.
Analysts' consensus rating on American Electric Power stock is cautiously optimistic, with a "Moderate Buy" rating overall. Out of 20 analysts covering the stock, opinions include five "Strong Buys," one "Moderate Buy," 13 "Holds," and one "Strong Sell." This configuration is slightly less bullish than three months ago, with six analysts suggesting a "Strong Buy."
As of writing, AEP is trading below the average analyst price target of $100.10.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
