American Electric Power Stock Upgraded To Buy At Guggenheim, Analysts Expect Utilities To Outperform In 2025: Retail Turns Bullish

Shares of American Electric Power Company Inc. (AEP) edged up in morning trade on Thursday after the stock was upgraded by analysts at Guggenheim.

According to TheFly, Guggenheim analysts have upgraded American Electric Power’s stock to ‘Buy’ from ‘Neutral’ while raising the price target to $101 from $86, implying an upside of over 3% from current levels.

Outlining their bull thesis for the AEP stock, the analysts say that the utility sector is oversold and undervalued and that it should outperform in 2025.

They add that their rating upgrade is not based on interest rates or yields but on the fact that this stock is “growing at a reasonable price” (GARP).

This comes days after Evercore analysts upgraded their price target on the stock to $102 from $96, underlining tailwinds such as rising electricity demand and moderating inflation.

Earlier this month, analysts at Bank of America (BofA) Securities upgraded AEP stock to ‘Buy’ from ‘Underperform,’ with a price target of $104. This followed AEP’s sale of its 19.9% stake in its transmission holding company for $2.8 billion.

Key factors aiding growth for the company include elevated infrastructure investment and power demand from data centers.

Following the announcement of the $500 billion Stargate AI project, power demand is expected to surge further.

Retail sentiment on Stocktwits entered the ‘bullish’ (61/100) territory from ‘neutral’ a day ago.

AEP sentiment and message volume January 23, 2025, as of 11 am ET | Source: Stocktwits

Stocktwits data pegs American Electric Power’s fourth-quarter earnings per share (EPS) at an estimated $1.23, staying flat year-on-year.

The company is expected to report slightly higher revenue at $4.86 billion during the quarter, up from $4.6 billion during the same period last year.

AEP’s stock price has gained 4.8% over the past six months, while its one-year performance is better, with gains of 25.7%.

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