American Electric Power (AEP) — Company Research

Last Updated: 24 September 2026

American Electric Power Company (Nasdaq: AEP) is one of the largest regulated electric utilities in the United States. It serves about 5.6 million customers in 11 states and owns the country's largest electricity transmission system. AEP earns an allowed return on the power plants, transmission lines and distribution networks that state commissions and the federal regulator (FERC) let it put into its rate base. Its growth story is now tied to data centres and heavy industry: at the Q2 2026 results on 30 July AEP said it had 69 GW of contracted new load by 2030. It raised 2026 operating EPS guidance to $6.25–6.55 and is working through a $78bn five-year capital plan. The shares have fallen back from their 52-week high of $140.58 to about $118. This refresh uses AEP's own earnings releases and SEC filings. It contains no analyst opinions and no price targets.

1. Company Snapshot

Field	Value
Legal name	American Electric Power Company, Inc.
Exchange / ticker	Nasdaq: AEP
Sector	Utilities — regulated electric utility (generation, transmission and distribution)
Headquarters	1 Riverside Plaza, Columbus, Ohio
CEO / Leadership	William J. (Bill) Fehrman, Chairman, President and Chief Executive Officer. CFO Trevor I. Mihalik
Employees	17,581 at 31 December 2025 (2025 Form 10-K)
Revenue (FY2025)	$21,876m, up 10.9%. H1 2026: $11,465m
Net income (FY2025)	GAAP EPS $6.70 basic ($6.66 diluted); operating (non-GAAP) EPS $5.97
Market cap	~$64.5bn at $118.40 on 23 September 2026 (544.4m shares)
Network	About 40,000 line miles of transmission, including more than 2,100 miles of 765 kV, and about 252,000 miles of distribution lines
Generation	About 33,000 MW owned and contracted (Q2 2026 release)
Dividend	$0.95 per quarter ($3.80 annualised)

2. Bull Case and Bear Case

Bull Case

• Contracted load growth: contracted new load rose to 69 GW by 2030 at the Q2 2026 results, from 63 GW at Q1 and 56 GW at Q4 2025. Virginia became the fifth state to approve a large-load tariff, and three more are pending.
• Guidance raised: 2026 operating EPS guidance was raised to $6.25–6.55 from $6.15–6.45, and management reaffirmed 7–9% annual operating EPS growth through 2030, with an expected compound rate above 9%.
• Largest rate-base build in its history: the capital plan was raised to $78bn for 2026–2030, with rate base expected to grow about 11% a year. Management cites line of sight to more than $10bn of additional projects.
• Equity need largely pre-funded: forward equity sales of about $2.94bn in May 2026 cover all currently planned marketed growth equity for the plan, according to AEP's September 2026 investor handout.
• Cheaper financing for Texas: AEP Texas secured a Department of Energy loan of up to $3.3bn for about 100 transmission projects, which the company says will save customers about $685m in interest.

Bear Case

• Debt keeps climbing: total long-term debt rose from $33.5bn at the end of 2021 to $47.3bn at the end of 2025 and $49.6bn at 31 March 2026. Construction spending of $8.45bn in 2025 exceeded operating cash flow of $6.94bn.
• Dilution continues: on top of the forward sales, AEP sold $665m of at-the-market equity in H1 2026 and plans about $1bn a year of at-the-market issuance through 2030.
• Affordability and rate-case pushback: Ohio's distribution case settled with a net $59m annual decrease, and Indiana Michigan Power has proposed a three-year residential rate freeze. Several rate cases in Oklahoma, Texas and Virginia are still pending.
• Data-centre concentration: much of the growth story rests on a small number of very large customers, such as the 4.25 GW initial supply AEP Ohio is positioned to provide to the SB Energy/OpenAI PORTS-Pike campus. A slowdown in AI infrastructure spending would hit the load forecast.

3. Revenue Segments

AEP reports four operating segments. The table shows each segment's FY2025 revenue from external customers as a share of consolidated revenue of $21,876m, from the segment note in the 2025 Form 10-K. AEP Transmission Holdco's total segment revenue was $2,377m, but most of it is billed to AEP's own operating companies, so only $493m is external.

Segment	% of revenue	What it is
Vertically Integrated Utilities — $12,556m	57.4%	State-regulated utilities that own generation as well as wires: Appalachian Power, Indiana Michigan Power, Kentucky Power, Public Service Company of Oklahoma (PSO), Southwestern Electric Power Company (SWEPCO) and Wheeling Power. FY2025 segment earnings $1,605m
Transmission & Distribution Utilities — $6,097m	27.9%	Wires-only utilities in the deregulated Ohio and Texas markets (AEP Ohio and AEP Texas). FY2025 segment earnings $816m
Generation & Marketing — $2,697m	12.3%	Competitive wholesale generation, retail and wholesale power marketing and trading. FY2025 segment earnings $287m
AEP Transmission Holdco — $493m external	2.3%	FERC-regulated transmission companies and joint ventures, earning formula-rate returns on transmission investment. FY2025 segment earnings $1,161m

Corporate and other items accounted for the remaining 0.2% of external revenue and a segment loss of $289m in FY2025.

4. Business Model & Moat

How it makes money. Regulators approve a rate base, which is the depreciated value of the capital AEP has invested, along with an equity share of that capital and an allowed return on equity. Recent awards include 9.84% in Ohio, 9.75% in Kentucky and West Virginia and 9.65% in Arkansas. Customers' bills are set to cover operating costs, depreciation, taxes and that return. Fuel and purchased power are largely passed through. Earnings therefore grow roughly in line with the rate base, adjusted for regulatory lag, weather and financing costs.

What protects it. AEP holds state franchises that give it a legal monopoly on distribution in its territories. Its transmission network carries FERC formula rates that update annually. A competing network of this scale could not be built in any realistic timeframe, so the moat is regulatory and physical rather than technological.

How growth is funded. Operating cash flow of $6.94bn in 2025 covered the dividend and part of the $8.45bn of construction spending. The rest came from new debt, equity (forward sales and at-the-market programmes) and asset sales. In June 2025 AEP sold a 19.9% minority stake in its Ohio and Indiana/Michigan transmission companies to KKR and PSP for about $2.8bn. AEP targets funds from operations to debt of 14–15%; its 10-K identifies 13% as the downgrade threshold at S&P and Moody's.

Large-load contracting. AEP negotiates large-load tariffs with minimum-demand charges and collateral, so existing customers do not bear the cost of grid upgrades built for data centres. Five states had approved such tariffs by 30 July 2026, and three were pending.

5. Financial Health

Revenue, GAAP EPS, dividends and debt come from AEP's Form 10-K XBRL data at SEC EDGAR. Operating EPS comes from AEP's fourth-quarter earnings releases. Figures are in US dollars. Long-term debt is non-current long-term debt from the balance sheet.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2021	16,792	+12.6%	$4.96	$4.74†	$3.00	$31,301m
FY2022	19,640	+17.0%	$4.49	$5.09†	$3.17	$34,315m
FY2023	18,982	-3.3%	$4.24	$5.25†	$3.37	$37,653m
FY2024	19,721	+3.9%	$5.58	$5.62†	$3.57	$39,308m
FY2025	21,876	+10.9%	$6.66	$5.97†	$3.74	$44,128m

† Adjusted EPS is AEP's operating earnings per share, a non-GAAP measure that excludes items such as mark-to-market effects, asset impairments, regulatory disallowances and gains on sales. GAAP EPS is diluted. The FY2021 YoY figure is against FY2020 revenue of $14,919m. Dividends are dividends declared per share in each calendar year. Current maturities of long-term debt were a further $3,194m at the end of 2025.

The quarterly table runs most recent quarter first, with the FY2025 total in bold. Quarterly GAAP EPS is basic, as reported in AEP's releases.

Quarter / Half	Revenue	Adjusted EPS	GAAP EPS
Q2 2026 (to 30 Jun 2026)	$5,445m	$1.36	$1.31
Q1 2026 (to 31 Mar 2026)	$6,020m	$1.64	$1.61
Q4 2025 (derived)‡	$5,315m	$1.19	$1.09
Q3 2025	$6,010m	$1.80	$1.82
Q2 2025	$5,087m	$1.43	$2.29
Q1 2025	$5,463m	$1.54	$1.50
FY2025 total	$21,876m	$5.97	$6.70

‡ Q4 2025 revenue is derived by subtracting nine-month revenue from the full year; EPS is as reported in the Q4 2025 release. The gap between GAAP and operating EPS in Q2 2025 reflects items AEP excludes from operating earnings.

Profitability. FY2025 operating income was $5,319m (FY2024: $4,304m). Depreciation and amortisation was $3,380m on the income-statement utility measure; the narrower depreciation, depletion and amortisation tag was $3,325m. In Q2 2026 operating EPS fell to $1.36 from $1.43. AEP attributed the fall to the minority-stake sale and the timing of tax items.

Cash flow, FY2025. Net cash from operating activities was $6,944m (FY2024: $6,804m). Construction expenditures were $8,453m, so operating cash flow less capex was about negative $1,509m. AEP also spent $3,453m acquiring productive assets, including generation facilities.

Balance sheet. At 31 December 2025 long-term debt was $47,322m, made up of $44,128m non-current and $3,194m due within one year. Short-term borrowings were $1,508m and cash and cash equivalents $197m. By 31 March 2026 total long-term debt had risen to $49,554m. The December 2025 ratings sheet shows the parent at Baa2 / BBB / BBB, all with stable outlooks. FFO to debt was 15.2% on S&P's measure and 13.9% on Moody's.

Guidance.

• 2026 operating EPS: $6.25–6.55, raised on 30 July 2026; the GAAP equivalent is $6.16–6.46.
• Longer-term growth: 7–9% a year in operating EPS through 2030.
• Capital plan: $78bn for 2026–2030. AEP said the plan would be rolled forward to include 2031 in the third quarter.

Follow the shares against these figures on the ChartsView Live Charts page.

6. Valuation Metrics

Raw metrics, September 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Share price	$118.40 at the close on 23 September 2026 (previous close $120.27)
Market cap	~$64.5bn ($118.40 × 544.4m shares outstanding)
Trailing P/E (GAAP)	~20.3x on TTM basic GAAP EPS of $5.83 (FY2025 $6.70 less H1 2025 $3.79 plus H1 2026 $2.92). On TTM operating EPS of $6.00 ($5.97 less $2.97 plus $3.00) the multiple is ~19.7x
P/E (forward)	~18.5x on the midpoint ($6.40) of AEP's 2026 operating EPS guidance of $6.25–6.55
P/S (TTM)	~2.8x (market cap ~$64.5bn / TTM revenue $22,791m, being FY2025 $21,876m less H1 2025 $10,550m plus H1 2026 $11,465m)
Enterprise value	~$111.6bn (market cap ~$64.5bn + total debt $47.3bn − cash $0.2bn per the 31 December 2025 balance sheet; total debt = current portion of long-term debt $3,194m + non-current long-term debt $44,128m). Including $1.5bn of short-term borrowings, about $113.1bn
EV/EBITDA (TTM)	~12.8x (EV ~$111.6bn / FY2025 EBITDA $8,699m; EBITDA = operating income $5,319m + depreciation and amortisation $3,380m, using the wider income-statement D&A figure)
P/FCF	n/m — free cash flow is negative. FY2025 FCF was about −$1,509m (operating cash flow $6,944m − construction expenditures $8,453m per the FY2025 cash flow statement), which is normal for a utility in a heavy build phase
52-week high	$140.58
52-week low	$106.78
Short interest (% of float)	~4.5% of float (24.34m shares short at the 31 August 2026 settlement; Nasdaq and Finviz), down from 36.01m shares at 30 June 2026
Days to cover	~7.2 days (Nasdaq, 31 August 2026 settlement, on average daily volume of 3.36m shares); Finviz shows 5.7 days on its own volume measure
Dividend / yield	~3.2% ($3.80 annualised / $118.40)

7. What Are They Building

A $78bn five-year plan. AEP raised its 2026–2030 capital plan from $72bn to $78bn on 5 May 2026. Transmission accounts for about $33bn, or 42%. Management said the plan would be rolled forward to include 2031 in the third quarter, and it cites line of sight to more than $10bn of further investment, including fuel cells in Wyoming, the Piketon transmission project in Ohio and additional generation.

765 kV backbone. In Q1 2026 AEP won new 765 kV transmission projects: about 315 miles in the SPP region, about 330 miles in PJM across Ohio and Indiana, and a roughly 200-mile MISO project in Wisconsin. AEP already operates more than 2,100 miles of 765 kV line.

Generation for large loads. AEP has secured about 13 GW of gas turbines and is evaluating up to 10 GW more. Oklahoma approved 1.3 GW of new generation for PSO. A January 2026 agreement to buy Bloom Energy fuel cells, a commitment of about $2.65bn, supports a planned Wyoming offtake. The deadline for that offtake's conditions has been extended to December 2026.

Ohio data-centre campus. On 17 August 2026 NVIDIA agreed to backstop up to $105bn of financing for the SB Energy/OpenAI PORTS-Pike campus in Ohio. AEP Ohio is positioned to supply the initial 4.25 GW, supported by a $4.2bn grid upgrade that SB Energy will fund.

Market structure. In May 2026 AEP said it was weighing leaving the PJM and SPP regional grid operators over slow generator interconnection. PJM approved resource-adequacy reforms in July.

8. Peer Comparison

Peer	Market cap (September 2026)	Key 2025 metric
American Electric Power (AEP)	~$64.5bn (Finviz, 23 Sep 2026)	FY2025 revenue $21,876m; diluted EPS $6.66 (AEP 10-K)
NextEra Energy (NEE)	~$160.7bn (Finviz, 23 Sep 2026)	FY2025 operating revenue $27,412m; diluted EPS $3.30 (NEE 10-K XBRL)
Southern Company (SO)	~$96.0bn (Finviz, 23 Sep 2026)	FY2025 revenue $29,553m; diluted EPS $3.92 (SO 10-K XBRL)
Duke Energy (DUK)	~$89.0bn (Finviz, 23 Sep 2026)	FY2025 operating revenue $32,237m; diluted EPS $6.31 (DUK 10-K XBRL)
Dominion Energy (D)	~$53.8bn (Finviz, 23 Sep 2026)	FY2025 revenue $16,506m; diluted EPS $3.45 (D 10-K XBRL)
Xcel Energy (XEL)	~$44.1bn (Finviz, 23 Sep 2026)	FY2025 operating revenue $14,669m; diluted EPS $3.42 (XEL 10-K XBRL)
Exelon (EXC)	~$42.0bn (Finviz, 23 Sep 2026)	FY2025 revenue $24,258m (EXC 10-K XBRL)

US electric utilities do not compete for customers inside their franchised territories. They compete for capital, for favourable regulatory outcomes and, increasingly, for large data-centre and industrial loads. Dominion, in northern Virginia, is the utility most directly comparable on data-centre exposure. AEP stands out for the size of its transmission network.

9. Insider Activity

Chairman and CEO Bill Fehrman made no open-market purchases or sales in 2026. His Form 4 filings show only a grant of 26,105 restricted stock units on 17 February 2026 and shares withheld to pay tax on vesting awards. He held 133,539 shares after 1 August 2026. No officer or director made an open-market purchase in 2026. The table lists 2026 open-market sales plus Fehrman's filings, from SEC Form 4s.

Name	Date	Type	Shares	Price	Value	Plan Type
Kate Dixon (Controller & Chief Accounting Officer)	08 Sep 2026	Sale	2,000	$125.00	~$250,000	Rule 10b5-1 plan adopted 5 Jun 2026
Bill Fehrman (Chairman, President & CEO)	01 Aug 2026	Tax withholding	6,283	$128.32	~$806,200	Shares withheld on vesting (code F)
Phillip Ulrich (EVP)	27 Feb 2026	Sale	4,106	$132.08	~$542,300	Rule 10b5-1 plan adopted 7 Aug 2025
Kelly Ferneau (EVP)	24 Feb 2026	Sale	1,351	$131.46	~$177,600	Rule 10b5-1 plan (Form 144 cites plan dated 15 May 2025)
Bill Fehrman (Chairman, President & CEO)	17 Feb 2026	Award	26,105 RSUs	Nil cost	Nil	Long-term incentive grant

Carl Icahn's 13F filing showed he had cut his AEP holding by about 64%, to 434,710 shares, at 30 June 2026.

10. Key Risks

• Cost recovery on a record capital plan (Regulatory): $78bn of investment only earns a return if commissions approve it in rate base. Pending cases include PSO in Oklahoma ($299m request, on interim rates since 1 July 2026), SWEPCO in Texas ($95m) and Appalachian Power in Virginia ($61.4m, with a decision due by 15 January 2027).
• Dependence on data-centre demand (Commercial): the 69 GW of contracted load and the 11% annual rate-base growth assume that hyperscaler and AI infrastructure spending continues. The 10-K lists reliance on large-load growth as a risk factor.
• Balance sheet and dilution (Financial): long-term debt reached $49.6bn at 31 March 2026. Funding also depends on forward equity settlements and about $1bn a year of at-the-market issuance. FFO to debt is targeted at 14–15%, against a 13% downgrade threshold.
• Affordability politics (Regulatory): rising bills have already brought a net rate decrease in Ohio and a proposed rate freeze at Indiana Michigan Power. Regulatory disallowances, such as those tied to the Pirkey plant retirement and the AEP Texas tracker, have cut 2026 EPS by a few cents each.
• Execution and supply chain (Operational): the 10-K flags execution and supply-chain risk, including tariffs, on a build programme that includes about 13 GW of gas turbines and hundreds of miles of new 765 kV line. Delays push back the point at which capital starts earning a return.
• Grid-operator and interest-rate exposure (Market): AEP depends on PJM, SPP and ERCOT rules for interconnection and capacity, and has openly considered leaving PJM and SPP. As with other long-duration utility shares, higher long-term interest rates tend to compress the valuation.

11. Recent Developments

• 09 Sep 2026 — Investor handout: equity largely covered. AEP said about $3bn of forward equity executed in May covers all currently planned marketed growth equity for the $78bn plan, alongside about $1bn a year of at-the-market issuance through 2030.
• 08 Sep 2026 — Chief accounting officer sale. Kate Dixon sold 2,000 shares at $125.00 under a Rule 10b5-1 plan.
• 26 Aug 2026 — Indiana bill reductions proposed. Indiana Michigan Power proposed about $59m of Indiana bill reductions in 2027 and a three-year residential rate freeze.
• 17 Aug 2026 — NVIDIA backs Ohio mega-campus. NVIDIA agreed to backstop up to $105bn of financing for the SB Energy/OpenAI PORTS-Pike campus, for which AEP Ohio is positioned to supply the initial 4.25 GW.
• 30 Jul 2026 — Q2 2026 results and guidance raise. Operating EPS $1.36 (Q2 2025: $1.43) and GAAP EPS $1.31. 2026 operating guidance raised to $6.25–6.55, with contracted load up to 69 GW. Virginia approved a large-load tariff and Oklahoma approved 1.3 GW of new generation.
• 21 Jul 2026 — Two directors join the board. David Marriott, chairman of Marriott International, and Charles Meyers, executive chairman of Equinix.
• 20 Jul 2026 — Dividend declared. A quarterly dividend of $0.95 was declared, went ex-dividend on 10 August and was paid on 10 September.
• 08 Jul 2026 — DOE loan for AEP Texas. A federal loan of up to $3.3bn for about 100 transmission projects, which AEP says will save customers about $685m.

Rates and inflation data move utility valuations; check the ChartsView Economic Calendar for upcoming releases.

12. Key Dates to Watch

• Expected Oct 2026 — next quarterly dividend declaration. Last year's was declared on 22 October 2025, with an ex-dividend date of 10 November and payment on 10 December; no 2026 dates have been announced
• Expected 4 Nov 2026 — Q3 2026 earnings, including the capital plan rolled forward to 2031. Nasdaq's estimated date; AEP has not yet confirmed it (Q3 2025 was reported on 29 October 2025)
• 08 Nov 2026 — the 61st EEI Financial Conference opens in Phoenix and runs to 10 November; AEP attended in 2025
• 31 Dec 2026 — deadline for Texas SB6 large-load interconnection rules, and the extended deadline for the Wyoming fuel-cell offtake conditions
• 15 Jan 2027 — statutory deadline for the Virginia SCC ruling on Appalachian Power's $61.4m base-rate request

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