American Electric Power Is Attractive Going Forward, Analyst Double-Upgrades Stock

Group 1 - BofA Securities analyst Ross Fowler upgraded American Electric Power Company Inc (AEP) from Underperform to Buy and raised the price target from $98 to $104 following the announcement of a $2.8 billion sale of a 19.9% minority stake in its transmission holding assets [1][3] - The asset sale is viewed as a strategic move to meet external equity needs, with expectations for AEP to address equity overhang in the short term [2][4] - AEP's progress in strengthening its balance sheet and potential for EPS growth makes it an attractive investment opportunity [3][4] Group 2 - The proceeds from the asset sale are expected to primarily reduce debt in the short term, with a lowered forecast for equity needs to $2 billion in external issuance [4] - The internal dividend reinvestment plan is projected to require only $100 million annually to achieve 6% – 8% EPS growth through 2029 [2][4] - The revised EPS outlook is $5.83 for 2025, $6.26 for 2026, $6.80 for 2027, and $7.33 for 2028, aligning with AEP's guidance for average EPS accretion of $0.11 – $0.12 [4][5] Group 3 - AEP shares are trading higher by 1.20% at $94.63 [5]