Analyst Note| Andrew Bischof, CFA, CPA |
We are reaffirming our $89 per share fair value estimate for American Electric Power after it reported second-quarter operating earnings of $1.18 per share, up from $1.08 in the same year-ago period. Management reaffirmed its 2021 operating earnings guidance of $4.55 to $4.75 and its long-term 5% to 7% growth rate. We expect management to achieve the midpoint of this range. AEP trades at a 5% discount to our fair value estimate as of late July, and we continue to view AEP as an attractive long-term holding. Our narrow moat and stable moat trend ratings remain unchanged.