American Electric Power enters the week after Q1 earnings with analysts openly competing to raise their targets — the clearest sign in months that the Street's long-standing caution on the utility is finally lifting.
The earnings print itself landed on May 5 and drew an immediate market response. Analysts at Scotiabank, Wells Fargo, and Mizuho all lifted price targets on May 6 alone — within hours of each other. Wells Fargo pushed its target to $148, up from $144, while maintaining an Overweight rating. Mizuho moved to $141 from $130, keeping Neutral. Scotiabank raised to $140 from $131. The direction of travel is unambiguous: across the past three weeks, nearly every action has been a target raise. Morgan Stanley is the lone dissenter, trimming fractionally to $136 from $137 on April 21 — though it held its Overweight rating. Truist and Seaport Global both initiated with Buy and upgraded to Buy, respectively, around the same time. The mean target now stands at $144.29, against a close of $137.04. That gap is modest rather than dramatic, suggesting the Street sees fair value nearby rather than a deep-value call.
The bullish frame rests on load growth. AEP has customer agreements locking in 24GW of new load by 2030, driven heavily by data center demand. Management has lifted the capex plan by roughly $16 billion to $70 billion, and the EPS growth forecast has been nudged up to around 7.25%. Bears counter that 42% coal exposure leaves AEP vulnerable to accelerated retirement costs, and that the FFO-to-debt ratio at 13.2% trails the company's own 14–15% target range — a pressure point if interest rates stay elevated. The analyst recommendation differential factor score ranks in the 97th percentile of the universe, which reflects the improving consensus tilt. EPS momentum, at the 52nd percentile over 30 days and 59th over 90 days, is positive but not exceptional.
Short positioning is a secondary story here, not the headline. SI runs at 3.5% of the free float — meaningful but not elevated for a large-cap utility. The notable move was a sharp drop from around 20 million shares in mid-April to roughly 18.3 million by late April, a decline of approximately 8% over two weeks. That unwinding has partially stalled, with SI edging marginally higher on the week by 0.5%. The borrow market is extremely loose. Cost to borrow is just 0.40% annualised, down 11% on the week and 16% on the month. Availability is far from constrained. The lending setup offers no friction to new shorts, but the short score of 40 and its 33rd-percentile rank suggest short sellers are not particularly interested at current levels.
Options flow adds a mild note of caution. The put/call ratio has climbed to 0.45, modestly above its 20-day mean of 0.43 and 1.3 standard deviations above that average. It is the highest reading since mid-April's brief defensive spike. At 0.45, the PCR remains well below the 52-week high of 0.60 — this is not a hedging panic, more a quiet ratcheting-up of downside protection after the post-earnings pop. The stock is up 1.1% on the week and 3.3% on the month, following the utility sector's broader resilience in a choppy tape.
Among correlated peers, XEL is the standout gainer, up 2.5% on the week. ETR has added 3.7%. At the other extreme, FE has fallen 7.5% over the same period — a notable divergence that underscores how company-specific the utility sector's story is right now. AEP's own move sits comfortably in the middle of the pack, consistent with a stock digesting a solid-but-not-spectacular earnings outcome rather than re-rating sharply in either direction.
The next data point worth watching is whether the post-earnings analyst consensus tightens further or whether holdouts at Barclays (Equal-Weight, $135 target, below the current price) and JPMorgan (Neutral, $139) move in line with the more bullish cohort — the spread between the cautious and optimistic camps is narrowing, and the next catalyst is likely to be how management frames the data centre load pipeline on any investor day commentary or follow-up guidance.
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