TD Cowen has lifted its price target for American Electric Power to $141 from $137 and reiterated a Buy recommendation on the utility's shares. The stock is trading at $128.46 and carries a price-to-earnings ratio of 19.24.
Analyst Shelby Tucker highlighted the breadth of capital opportunities in the company’s regulated operating regions and noted incremental gains in returns on equity. "AEP once again showed its impressive pipeline of capital opportunities in its operating regions and execution continues to show marginal improvements to earned ROEs," Tucker said. The company’s reported return on common equity stands at 12%, and a PEG ratio of 0.99 points to an attractive valuation relative to expected growth.
Tucker indicated she expects the company to continue executing on projects that narrow the gap in its return on equity, and she cited anticipated growth in data center demand as a driver that could lift earnings per share growth above historical norms.
Recent quarterly results provided supporting evidence for the more bullish analyst outlook. American Electric Power reported fourth-quarter operating earnings of $1.19 per share, topping analyst expectations of $1.14. Revenue for the quarter rose to $5.31 billion, ahead of the consensus estimate of $4.99 billion. The company also reaffirmed its 2026 outlook.
Market commentators have increasingly adjusted their views on AEP. Jefferies moved the stock to a Buy from Hold, citing rising demand from data centers and a significant increase in contracted load expected by 2030. Wolfe Research likewise upgraded the company to Outperform, pointing to effective execution under new management and identifiable growth opportunities.
Outside of analyst coverage, regional transmission developments are progressing. PJM Interconnection approved a major electric transmission project for central Ohio being developed by Transource Energy and FirstEnergy Transmission through their joint venture, Grid Growth Ventures LLC. The approved plan calls for roughly 300 miles of new transmission lines and upgrades to multiple substations to address growing power needs in the area.
Investors have rewarded the stock over the past year: AEP has gained roughly 27% and is trading near its 52-week high. TD Cowen’s price-target increase and the recent analyst upgrades reflect a combination of underlying operating results, confidence in the company’s capital program and expectations for demand growth in key customer segments.
What this means
- TD Cowen’s raise to $141 reflects confidence in AEP’s capital pipeline and modest improvements in earned ROEs.
- Quarterly results beat estimates on both earnings per share and revenue, and the company has reaffirmed its 2026 outlook.
- Other analysts have upgraded the stock, citing higher data center demand, increased contracted load projections to 2030 and improved execution under new management.
Analyst quote
"AEP once again showed its impressive pipeline of capital opportunities in its operating regions and execution continues to show marginal improvements to earned ROEs," Shelby Tucker said.
The combination of a supportive capital program, recent quarterly beats and external endorsements from other brokerages underpin the current analyst sentiment. At the same time, the company’s exposure to large infrastructure projects and evolving demand patterns from major customers like data centers will be an important backdrop for future earnings trajectories.