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American Electric Power Company Inc

Exchange: NASDAQSector: UtilitiesIndustry: Utilities - Regulated Electric

American Electric Power is committed to improving our customers' lives with reliable, affordable power. We expect to invest $72 billion from 2026 through 2030 to enhance service for customers and support the growing energy needs of our communities. Our nearly 17,000 employees operate and maintain the nation's largest electric transmission system with approximately 40,000 line miles, along with more than 252,000 miles of distribution lines to deliver energy to 5.6 million customers in 11 states. AEP also is one of the nation's largest electricity producers with approximately 31,000 megawatts of diverse owned and contracted generating capacity. We are focused on safety and operational excellence, creating value for our stakeholders and bringing opportunity to our service territory through economic development and community engagement. Our family of companies includes AEP Ohio, AEP Texas, Appalachian Power (in Virginia, West Virginia and Tennessee), Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma, and Southwestern Electric Power Company (in Arkansas, Louisiana, east Texas and the Texas Panhandle). AEP also owns AEP Energy, which provides innovative competitive energy solutions nationwide. AEP is headquartered in Columbus, Ohio.

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Net income compounded at 10.9% annually over 6 years.

Current Price

$132.68

+0.77%

GoodMoat Value

$116.34

12.3% overvalued
Profile
Valuation (TTM)
Market Cap$71.02B
P/E19.84
EV$67.98B
P/B
Shares Out535.27M
P/Sales3.25
Revenue$21.88B
EV/EBITDA7.74

American Electric Power Company Inc (AEP) Valuation

GoodMoat Analysis

Based on data as of March 26, 2026

American Electric Power (AEP) appears unfavourable from a value investing perspective based on the GoodMoat framework. The current price trades at a premium to the fair value target, offering no margin of safety, and key valuation metrics like the negative free cash flow yield are concerning.

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Based on the GoodMoat Investment Framework's valuation assessment, AEP's current price of $128.3 is approximately 10% above the platform's fair value target of $116.34. This results in a negative margin of safety, which falls into the 'Unfavourable' band per Section 4's DCF guidance (a margin of safety below 10% is considered unfavourable). The forward P/E of 19.2x is elevated for a regulated utility, especially when considering the company's negative free cash flow yield of -7.2%, which indicates the stock is not generating cash for shareholders at the current price. While the 13.2% YoY revenue growth is strong for the sector, the quality of that growth is questionable given the cash flow profile. The combination of trading at a premium to fair value, a negative FCF yield, and a P/E that may not be justified by the underlying cash generation makes the valuation appear full or expensive relative to the business's fundamental quality as presented in the data. For a value investor seeking a margin of safety, the current price does not meet the framework's criteria for an attractive entry point.

AEP Fair Value Estimate

$116.3412.3% overvalued

Blended fair value estimate based on DCF, Graham Number, and earnings-based models.

AEP Valuation Metrics

FCF$-4.96B
FCF Growth Rate
EPS Growth (CAGR)
WACC10.00%

AEP Valuation & Fair Value Analysis

American Electric Power Company Inc (AEP) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.

The GoodMoat Fair Value target for American Electric Power Company Inc is $116.34. The current stock price is $132.68, suggesting the stock is 14.0% overvalued.

The price-to-earnings (P/E) ratio is 19.84. Price-to-sales ratio is 3.25. Enterprise value to EBITDA is 7.74. PEG ratio is -1.55.

GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of American Electric Power Company Inc's intrinsic value.