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American Electric Power (AEP) Gains As Market Dips: What You Should Know

·3 min read

In the latest trading session, American Electric Power (AEP) closed at $94.35, marking a +1.68% move from the previous day. This change outpaced the S&P 500's 0.93% loss on the day. At the same time, the Dow lost 0.43%, and the tech-heavy Nasdaq lost 0.17%.

Coming into today, shares of the utility had gained 0.41% in the past month. In that same time, the Utilities sector lost 1.68%, while the S&P 500 gained 6.31%.

American Electric Power will be looking to display strength as it nears its next earnings release, which is expected to be July 27, 2022. In that report, analysts expect American Electric Power to post earnings of $1.13 per share. This would mark a year-over-year decline of 4.24%. Our most recent consensus estimate is calling for quarterly revenue of $4.19 billion, up 9.6% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.99 per share and revenue of $18.22 billion, which would represent changes of +5.27% and +8.41%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for American Electric Power. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.51% lower. American Electric Power is currently a Zacks Rank #3 (Hold).

Investors should also note American Electric Power's current valuation metrics, including its Forward P/E ratio of 18.6. Its industry sports an average Forward P/E of 18.26, so we one might conclude that American Electric Power is trading at a premium comparatively.

It is also worth noting that AEP currently has a PEG ratio of 3. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Utility - Electric Power stocks are, on average, holding a PEG ratio of 3.16 based on yesterday's closing prices.

The Utility - Electric Power industry is part of the Utilities sector. This industry currently has a Zacks Industry Rank of 92, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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