BTIG upgrades American Electric Power to Buy, sees growth runway extending

what happened

Shares of American Electric Power gained 2.2% on Tuesday after BTIG raised its rating on the utility to Buy from Neutral and set a $147 price target. The analyst called the company “one of the key beneficiaries of the large load theme over the next decade,” according to Seeking Alpha.

The company has already outlined high single-digit growth through the end of the decade. BTIG analyst Alex Kania expects more growth to be signaled on the Q3 call, with visibility stretching well into the 2030s, and believes management has delivered solid operational and financial results over the past year or so.

Kania also expects the company to roll its long-term capital plan forward to 2031 and detail potentially more than $10 billion in additional capital spending. He pointed to the recent $4 billion fuel cell and small modular reactor announcements as an example of AEP's forward-looking approach to power supply. He suggested that the sector's weakness since summer could offer an attractive entry point ahead of a likely strong Q3 report.

why it matters

For the utilities sector, the upgrade tied to data-center and large-load demand shows that investors remain willing to pay for growth in electricity consumption. AEP's Q3 results and any new capital plan could set benchmarks for other regulated utilities with similar load exposure.

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