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American Electric Power Co Inc AEP

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

AEP Progresses on Renewable Energy Ambitions, Reports Solid Second-Quarter Earnings

Andrew Bischof, CFA, CPA Senior Equity Analyst

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.

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Company Profile

Business Description

American Electric Power is one of the largest regulated utilities in the United States, providing electricity generation, transmission, and distribution to more than 5 million retail customers in 11 states. About 43% of AEP's of capacity is coal, with the remainder from a mix of natural gas (29%), renewable energy and hydro (18%), nuclear (8%), and demand response (2%). Vertically integrated utilities, transmission and distribution, and generation and marketing support earnings.

Contact
1 Riverside Plaza
Columbus, OH, 43215-2373
T +1 614 716-1000
Sector Utilities
Industry Utilities - Regulated Electric
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 16,787

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