AEP Stock Forecast & Price Target

American Electric Power is positioned for long-term growth, with customer agreements securing 24GW of new load by 2030, indicating strong demand particularly from commercial and industrial sectors. The company has increased its capital expenditure plan by approximately $16 billion, raising the total to $70 billion, driven by robust long-term trends, especially from data center customers. Additionally, AEP's earnings per share growth forecast has been adjusted upward to approximately 7.25%, reflecting a commitment to exceeding market expectations and solidifying its financial strength.

American Electric Power faces significant risks that contribute to a negative outlook, including potential acceleration of coal retirements due to environmental regulations, which may lead to increased capital expenditures for replacement generation and stranded assets. The company's reliance on a mix of energy sources, including 42% coal, creates vulnerability to rising interest rates and tighter credit markets that could exacerbate financing issues, especially if new projects face delays or budget overruns. Furthermore, the trailing twelve months (TTM) funds from operations (FFO) to debt ratio stands at 13.2%, notably below the targeted range of 14% to 15%, indicating potential financial strain and reduced flexibility to adapt to market challenges.