American Electric Power Sees PT Raised to $150, Projects 10–13% Returns
Jefferies upgraded AEP to Buy, raised price target from $137 to $150 after Q4 operating earnings of $1.19 beat the consensus estimate of $1.15. The utility projects annual shareholder returns of 10%-13% through 2030 backed by a $72 billion capital plan, AI-driven data center growth and a 7%-9% earnings CAGR.
1. Jefferies Upgrade and Price Target
Jefferies upgraded American Electric Power to a Buy rating and lifted its price target from $137 to $150, citing robust financial results and strategic growth initiatives. The new target implies further upside potential for the stock based on revised earnings forecasts and a positive sector outlook.
2. Q4 Operating Earnings Beat
AEP reported fourth-quarter operating earnings of $1.19 per share, outperforming the consensus estimate of $1.15 and demonstrating resilient margin performance. Full-year operating earnings reached $5.97 per share, exceeding expectations despite slight year-over-year EPS declines.
3. Growth Outlook and Capital Plan
The company outlined a $72 billion capital expenditure plan through 2030, earmarked for grid upgrades, renewable integration and AI-driven data center projects. Management projects annual shareholder returns of 10%-13% and a 7%-9% earnings compound annual growth rate, supported by additional $5–8 billion in targeted investments.
4. Shareholder Returns and Dividends
AEP raised its quarterly dividend to $0.95 per share and delivered a 29% total shareholder return in 2025, among the highest in the utility sector. Long-term guidance emphasizes sustained dividend growth and improved cash flow generation to support future distributions.