American Electric Power Company, Inc. (AEP) Insiders Knew Better, But Did You Listen?

American Electric Power Company, Inc. (NYSE:AEP) has been upgraded by JP Morgan, which now rates the stock as Overweight versus Neutral prior rating, according to a note issued on March 12. Analysts at Guggenheim, shed their positive views on January 07 by lowering it fromBuy to Neutral. Brokerage firm BofA/Merrill, looks cautious as they stick to prior recommendation of Buy, in a call on October 26. However, they did change the target price from $76 to $78. Guggenheim analysts came out with bullish views on September 10 when the call was made. They think the stock is now Buy compared to to their prior call for Neutral.

AEP stock dropped -0.24% in recent trade and currently has a stock-market value of $40.92B. The shares finished at $82.98, after trading as low as $82.67 earlier in the session. It hit an intraday high Thursday at $83.73. Trading activity significantly improved as the volume at ready counter increased to 2,905,770 shares versus 2,367,620 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 2,542,872 shares. The stock is now 32.32% above against its bear-market low of $62.71 on June 11, 2018. It has retreated -0.9% since it’s 52-week high of $83.73 reached in March. Now the market price is up 25.65% on the year and up 11.02% YTD.

Wall Street’s most bullish American Electric Power Company, Inc. (NYSE:AEP) analysts are predicting the share price to blow past $89 per share during the next 12 months. The current median share price forecast by them is $83, suggesting that the stock could increase 0.02% in that time frame. The average price target of $82.4 calls for a nearly -0.7% increase in the stock price.

American Electric Power Company, Inc. (AEP)’s 50 day simple moving average (SMA 50) price is $78.51 and its 200-day simple moving average (SMA 200) price is $73.65. The company’s stock currently has a total float of 493.15M shares. Its weekly volatility is hovering around 0.99% and felt 1.17% volatility in price over a month. On the upside, the share price will test short term resistance at around $83.58. On a downside, the stock is likely to find some support, which begins at $82.52. The failure to get near-term support could push it to $82.07.

When looking at valuations, American Electric Power Company, Inc. (AEP) has a pricey P/E of 21.42x as compared to industry average of 15.27x. Moreover, it trades for 18.86 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 2.15x price/book and 2.53x price/sales. Compared to others, American Electric Power Company, Inc. is in a different league with regards to profitability, having net margins of 11.9%. To put some perspective around this, the industry’s average net margin is 22.98%. AEP’s ROE is 10.2%, which is also considerably worse than the industry’s ROE of 10.78%. It’s also not liquid in the near term, with a current ratio of 0.5. The stock has a debt/capital of 1.32.

Shares of AEP have gained 8% since the company’s most recent earnings report. Over the past 12 fiscal quarters, American Electric Power Company, Inc. (NYSE:AEP) has topped consensus earnings estimates in 6 quarters (50%), missed earnings in 5 quarters (41%), whereas at 1 occasion EPS met analyst expectations. AEP last reported earnings that exceeded expectations. The company raked in $0.72 per share, -62.3% change on the same period last year. That was better than consensus for $0.71. Revenue for the recent quarter stood at $3.8 billion, down 0% on last year and below the $4.04 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $3.89 billion to $4.62 billion, which should be compared with $4.07 billion generated last year. EPS is seen in a range of $0.99 to $1.08, against the $1.05 reported a year ago.