Mizuho Securities has adjusted its price target for American Electric Power (NASDAQ: NASDAQ:AEP), increasing it to $100.00 from the previous $83.00, while keeping a Neutral rating on the stock of the company.
The revision follows the interim CEO Ben Fowke's final earnings call, where he emphasized the company's strong performance. To be sure, the company reported a significant 12.4% year-over-year commercial load growth, buoyed by a surge in data center demand, which has led to an additional 15 gigawatts of customer commitments.
But that's not all, for the first time in recent history, AEP's funds from operations (FFO) to debt ratio reached 14.6%, aligning with its target range of 14-15%.
However, the company's unchanged return on equity (ROE) at 8.9% and a slight 0.9% decline in load from the high-margin residential customer segment have tempered the positive outlook. Despite these figures, the updated price target reflects the current market multiples.
During the question and answer session of the earnings call, analysts probed further into the company's financial strategies.
Although it appears that management has completed its capital recycling and asset sales, the analysts inquired whether there are additional parts of the company that could be leveraged to fund further growth.
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