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American Electric Power (AEP) Flat As Market Sinks: What You Should Know

·3 min read

In the latest trading session, American Electric Power (AEP) closed at $98.26, marking no change from the previous day. This change was narrower than the S&P 500's 2.91% loss on the day. Elsewhere, the Dow lost 2.73%, while the tech-heavy Nasdaq lost 0.25%.

Prior to today's trading, shares of the utility had lost 0.27% over the past month. This has lagged the Utilities sector's gain of 0.91% and the S&P 500's gain of 0.84% in that time.

Wall Street will be looking for positivity from American Electric Power as it approaches its next earnings report date. The company is expected to report EPS of $1.13, down 4.24% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.18 billion, up 9.11% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.01 per share and revenue of $18.16 billion. These totals would mark changes of +5.7% and +8.04%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for American Electric Power. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.43% higher within the past month. American Electric Power is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, American Electric Power currently has a Forward P/E ratio of 19.6. This represents a premium compared to its industry's average Forward P/E of 19.27.

Also, we should mention that AEP has a PEG ratio of 3.16. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Utility - Electric Power stocks are, on average, holding a PEG ratio of 3.32 based on yesterday's closing prices.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 149, putting it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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