MODEL VERDICT
American Electric Power Company, Inc. (AEP)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | MODERATE | 0.56 | $136.91 | CURRENT | — |
| Apr 24, 2026 | MODERATE | 0.58 | $134.73 | CURRENT | — |
| Apr 17, 2026 | MODERATE | 0.62 | $133.66 | CURRENT | — |
| Apr 16, 2026 | MODERATE | 0.60 | $134.39 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.38 | $136.30 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Industry Median P/E 13 industry peers | $156.51 | +14.3% | 22% | A | Peer Data |
| EV/EBITDA 13 industry peers | $203.51 | +48.6% | 20% | A- | Peer Data |
| Dividend Yield 12 industry peers | $132.16 | -3.5% | 18% | B | Supplementary |
| Forward P/E 13 analyst estimates | $114.88 | -16.1% | 12% | A- | Analyst Est. |
| EV/EBIT 13 industry peers | $202.08 | +47.6% | 7% | B+ | Peer Data |
| Peg Ratio 7 industry peers | $153.51 | +12.1% | 5% | B | Data |
| EV To Revenue 13 industry peers | $184.48 | +34.7% | 4% | B | Data |
| Earnings Yield 13 industry peers | $156.51 | +14.3% | 4% | B | Data |
| Weighted Output Blended model output | $162.60 | +18.8% | 100% | 96 | UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 17× | 19× | 21× (Current) | 23× | 25× |
|---|---|---|---|---|---|
| Bear Case (3%) | $117 | $131 | $145 | $158 | $172 |
| Conservative (6%) | $120 | $134 | $148 | $162 | $176 |
| Base Case (8.5%) | $123 | $137 | $152 | $166 | $181 |
| Bull Case (12%) | $126 | $141 | $156 | $171 | $186 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 19.33 | 18.84 | 16.53 | 24.36 | 2.67 |
| EV/EBIT | 22.69 | 22.33 | 20.12 | 26.53 | 2.23 |
| EV/EBITDA | 11.98 | 12.81 | 7.41 | 14.11 | 2.21 |
| P/FFO | 8.44 | 8.11 | 7.71 | 10.04 | 0.80 |
| P/TBV | 1.96 | 1.97 | 1.67 | 2.36 | 0.21 |
| P/B Ratio | 1.95 | 1.97 | 1.67 | 2.35 | 0.21 |
| Div Yield | 0.04 | 0.03 | 0.03 | 0.04 | 0.00 |
| P/S Ratio | 2.63 | 2.69 | 2.18 | 3.01 | 0.27 |
Based on our peer multiples analysis with 21 valuation metrics, the model estimates AEP's fair value at $162.60 vs the current price of $136.91, implying +18.8% upside potential. Model verdict: Undervalued. Confidence: 96/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $162.60 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $148.41 (P10) to $165.29 (P90), with a median of $156.65.
AEP's current P/E of 20.6x compares to the industry median of 23.5x (13 peers in the group). This represents a -12.5% discount to the industry. The historical average P/E is 19.3x over 7 years. Signal: Slightly Cheap.
35 analysts cover AEP with a consensus rating of Buy. The consensus price target is $136.20 (range: $107.00 — $150.00), implying -0.5% upside from the current price. Grade breakdown: Strong Buy (0), Buy (22), Hold (13), Sell (0), Strong Sell (0).
The model confidence score is 96/100, based on: data completeness (26), peer quality (25), historical depth (20), earnings stability (15), and model agreement (10). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Margin reversion: Current net margin of 17.1% is 3.4 percentage points above the 7-year average (13.7%), with a Z-score of +1.9σ. If margins normalize, fair value could drop to ~$103. (2) Multiple compression: AEP trades at the 5490th percentile of its historical P/E range. A reversion to median (19.3×) would imply significant downside. (3) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that AEP's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +1.9σ, meaning margins are 1.9 standard deviations above their historical average. If margins revert to the 7-year mean (13.7%), the model estimates fair value drops by 2440.0% to approximately $103. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.