American Electric Power Company, Inc.

DB:AEP Stock Report

Market Cap: €49.9b

American Electric Power Company Valuation

Is AEP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of AEP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AEP (€94.5) is trading above our estimate of fair value (€23.07)

Significantly Below Fair Value: AEP is trading above our estimate of fair value.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AEP?

Key metric: As AEP is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for AEP. This is calculated by dividing AEP's market cap by their current earnings.
What is AEP's PE Ratio?
PE Ratio19.7x
EarningsUS$2.64b
Market CapUS$51.97b

Price to Earnings Ratio vs Peers

How does AEP's PE Ratio compare to its peers?

The above table shows the PE ratio for AEP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average20x
EBK EnBW Energie Baden-Württemberg
28.5xn/a€17.1b
LEC Lechwerke
25.9xn/a€2.5b
EOAN E.ON
17.5x8.9%€31.4b
RWE RWE
8.2x-10.8%€23.1b
AEP American Electric Power Company
19.7x9.1%€52.0b

Price-To-Earnings vs Peers: AEP is good value based on its Price-To-Earnings Ratio (19.7x) compared to the peer average (20x).

Price to Earnings Ratio vs Industry

How does AEP's PE Ratio compare vs other companies in the European Electric Utilities Industry?

2 CompaniesPrice / EarningsEstimated GrowthMarket Cap
AEP 19.7xIndustry Avg. 12.7xNo. of Companies10PE0612182430+
2 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: AEP is expensive based on its Price-To-Earnings Ratio (19.7x) compared to the European Electric Utilities industry average (12.7x).

Price to Earnings Ratio vs Fair Ratio

What is AEP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AEP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio19.7x
Fair PE Ratio20.5x

Price-To-Earnings vs Fair Ratio: AEP is good value based on its Price-To-Earnings Ratio (19.7x) compared to the estimated Fair Price-To-Earnings Ratio (20.5x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst AEP forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€94.50
€96.81
+2.4%
7.4%€111.39€82.59n/a18
Nov ’25€91.00
€94.18
+3.5%
8.0%€104.76€79.73n/a18
Oct ’25€92.00
€90.34
-1.8%
7.0%€99.73€77.27n/a18
Sep ’25€90.00
€89.91
-0.1%
6.6%€100.22€77.65n/a17
Aug ’25€90.00
€89.58
-0.5%
6.3%€99.16€76.92n/a17
Jul ’25€81.50
€84.46
+3.6%
6.3%€93.52€75.75n/a17
Jun ’25€81.00
€82.36
+1.7%
7.8%€92.07€67.21n/a17
May ’25€81.00
€82.51
+1.9%
6.5%€92.59€68.28n/a17
Apr ’25€78.23
€79.21
+1.3%
6.8%€90.62€66.82n/a17
Mar ’25€78.35
€80.04
+2.2%
6.3%€91.36€69.67n/a17
Feb ’25€72.33
€80.16
+10.8%
6.5%€91.31€69.63n/a17
Jan ’25€73.62
€78.74
+7.0%
6.6%€89.45€67.31n/a17
Dec ’24€73.07
€79.96
+9.4%
6.8%€90.96€68.45n/a16
Nov ’24€71.38
€84.92
+19.0%
7.6%€94.62€71.44€91.0017
Oct ’24€70.48
€88.33
+25.3%
7.0%€99.57€70.92€92.0017
Sep ’24€72.25
€87.76
+21.5%
8.0%€104.02€68.58€90.0017
Aug ’24€76.74
€88.37
+15.2%
6.1%€103.03€79.78€90.0016
Jul ’24€76.93
€89.52
+16.4%
6.4%€103.97€80.51€81.5016
Jun ’24€77.59
€94.72
+22.1%
5.3%€105.51€81.70€81.0015
May ’24€84.04
€93.02
+10.7%
6.3%€103.46€78.95€81.0014
Apr ’24€82.78
€94.80
+14.5%
4.5%€105.02€88.29€78.2313
Mar ’24€82.86
€97.30
+17.4%
5.5%€107.11€89.10€78.3514
Feb ’24€86.06
€94.22
+9.5%
5.8%€102.86€85.57€72.3314
Jan ’24€89.66
€97.01
+8.2%
6.1%€108.31€86.65€73.6214
Dec ’23€92.89
€93.85
+1.0%
8.1%€105.23€77.23€73.0714
Nov ’23€88.70
€97.55
+10.0%
7.5%€110.35€80.99€71.3814

Analyst Forecast: Target price is less than 20% higher than the current share price.

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