American Electric Power Company, Inc. AEP
AEP's pullback to $125.60 — below both the 50-day ($131.1) and 200-day ($126.7) moving averages with RSI near 40 — has brought valuation back to roughly peer-parity at 21.6x P/E versus the 21.6x peer median and 3.0x P/S versus 3.1x median, removing the premium that previously warranted caution. The fundamental growth story remains intact: EPS climbed from $4.24 in FY2023 to $6.66 in FY2025, management raised FY2026 guidance to $6.25–$6.55 on 69 GW of contracted load and a $78B capital plan, and smart money scores have recovered from 0.0132 in Q4 2025 to 0.0821 in Q2 2026 with fund count rising from 56 to 59.
Insiders are net buyers over 24 months (+158K shares, ~$15M net value), and the Q2 EPS miss was attributed to tax timing rather than operational deterioration. The main overhang is total debt at $50.2B and the anomalous FY2025 capex figure ($130M vs $7.77B in FY2024), which obscures true free cash flow, but operating cash flow of $6.94B is strong and growing.
What could go wrong
- Balance sheet leverage. Total debt has climbed from $36.7B in FY2021 to $50.2B in FY2025 alongside a $78B capital plan, raising financing cost and credit risk if rates stay elevated.
- Capex data anomaly. FY2025 reported capex of $130M versus $7.77B in FY2024 is clearly unreliable, making the $6.81B reported FCF untrustworthy and clouding cash generation analysis.
- Data center demand reversal. The thesis leans heavily on 69 GW of contracted load from data centers; any slowdown in AI infrastructure buildout or contract cancellations would undermine the growth premium.
- Technical weakness. Stock trades below both the 50-day and 200-day MAs with a bearish MACD histogram (-0.34) and RSI at 39.9, suggesting near-term momentum has not yet stabilized.
What would change my mind
Where this comes from: FMP TTM fundamentals · peer_relative · smart_money 13F composite · insider summary. Orin's read on AEP; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All AEP filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Capital Management | $4.9B | 0.1% of fund |
| State Street | $4.2B | 0.1% of fund |
| Vanguard Portfolio Management | $3.2B | 0.1% of fund |
| Invesco | $2.7B | 0.2% of fund |
| Morgan Stanley | $2.6B | 0.1% of fund |
| Geode Capital Management | $2.0B | 0.1% of fund |
133 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 145 Form 4 filings, net $14.7M. Of the 50 on hand, 0 were open-market purchases and 2 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about AEP
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 20.3× | 17.9× | 25.9× |
| EV/EBITDA | 13.7× | 12.0× | — |
| P/S | 2.86× | 2.52× | — |
| P/B | 2.0× | 1.9× | — |
Its P/E sits 80th percentile of its own last 5 years (+1.24σ from its own mean).
-2.6%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $6.8B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$140
$129 – $147 · +18% against today's price
- 22 buy or overweight
- 14 hold
- 0 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| AEPAmerican Electric Power Company, Inc. | $64B | 20.3× | 13.7× | 49.0% | 13.9% | 10% |
| DDominion Energy, Inc. | $54B | 21.2× | 14.5× | 49.3% | 13.9% | 9% |
| DUKDuke Energy Corporation | $89B | 17.1× | 11.1× | 68.2% | 15.7% | 10% |
| EDConsolidated Edison, Inc. | $38B | 16.8× | 9.9× | 76.0% | 12.5% | 9% |
| ETREntergy Corporation | $46B | 25.1× | 13.8× | 38.9% | 13.5% | 10% |
| EXCExelon Corporation | $42B | 14.9× | 10.3× | 24.5% | 11.0% | 10% |
| PEGPublic Service Enterprise Group Incorporated | $34B | 16.7× | 13.3× | 85.4% | 16.0% | 12% |
| SRESempra | $52B | 22.8× | 13.5× | 41.7% | 16.8% | 7% |
| VSTVistra Corp. | $47B | 23.0× | 10.2× | 13.0% | 13.9% | 41% |
| XELXcel Energy Inc. | $44B | 19.3× | 12.6× | 48.8% | 15.3% | 10% |
The median is of the 9 peers listed above and nothing else — check it against the column. This company trades 5.7% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $293 | $128.90 · +127% | 2026-06-10 |
| Levered DCF | $63 | $128.90 · −52% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.