American Electric Stock Rises Pre-Market As Analysts Cheer Stake Sale, CFO Appointment: Retail Signals More Upside
Retail sentiment on Stocktwits flipped to bullish as American Electric rallied on analyst confidence post-Transcos deal and Trevor Mihalik's appointment as CFO.
FollowAmerican Electric Power Company Inc. (AEP) gained 0.5% in pre-market trading on Monday after Bank of America (BofA) issued a double upgrade to a ‘Buy’ rating, raising its price target to $104 from $98.
The move follows a $2.82 billion minority stake sale in its transmission assets and Trevor Mihalik's recent appointment as Chief Financial Officer (CFO).
The company finalized a strategic partnership with KKR and PSP Investments last week, selling a 19.9% equity interest in its Ohio, Indiana, and Michigan Transmission Companies (Transcos).
The transaction is viewed as a strategic measure to address financing needs in alignment with AEP's long-term growth strategy, according to the company.
AEP’s stock has been rallying for three consecutive sessions, gaining 3.5%.
BofA analyst Ross Fowler highlighted the transmission asset sale as a strategic step that addresses the company’s equity needs without resorting to external equity markets, according to TheFly.
Fowler now expects American Electric to issue a more manageable $2 billion in equity during the second half of 2025, mitigating what was perceived as an equity overhang.
Morgan Stanley echoed BofA’s optimism, calling the deal immediately accretive to earnings per share (EPS) while addressing 52% of the equity requirements in AEP’s financing plan.
Morgan Stanley maintained an ‘Overweight’ rating and a $103 price target on the stock, as per TheFly, noting that the sale reduces balance sheet risks and enhances the company’s ability to execute its growth strategy.
American Electric Power Company Inc. Sentiment and Message Volume on Jan.13 as of 7:30 a.m. ET | Source: Stocktwits
On Stocktwits, retail sentiment around American Electric flipped to ‘extremely bullish’ from ‘bearish’ a week ago, as chatter also increased to ‘high’ from ‘normal’ levels.
One user pointed to a ‘double bottom’ technical pattern, suggesting further gains in AEP stock.
Another noted pre-market gapping and volume surges are strong bullish signals.
The company’s stock has risen 11.4% over the last year.
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