American Electric Power (AEP) Downgraded to ‘Neutral’, Price Target Trimmed

Core Viewpoint - American Electric Power Company, Inc. (AEP) has been downgraded from 'Buy' to 'Neutral' by BofA analyst Ross Fowler due to valuation concerns despite its strong growth outlook and recent performance [3]. Group 1: Company Performance - AEP is one of the largest electric utilities in the United States, serving millions of homes and businesses daily [2]. - In 2025, AEP's stock surged by 25%, outperforming the overall S&P Utility index, which gained approximately 12.7% [3]. - AEP is currently trading at a 4% premium compared to its peers, which limits its upside potential [3]. Group 2: Growth Initiatives - AEP announced plans to acquire solid oxide fuel cells from Bloom Energy for $2.65 billion, aiming to develop a fuel cell power generation facility in Wyoming [4]. - The company has signed a 20-year offtake agreement for 100% of the output from the planned facility with an unnamed customer [4]. Group 3: Analyst Insights - BofA acknowledges AEP's strong growth outlook, particularly in Texas, but expects regulatory relationships to take time to develop, leading to limited near-term prospects [3].