AEP Valuation

American Electric Power Company Inc

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111.020

-0.76(-0.680%)1D

Overview
Forecast
Valuation
Earnings

AEP Relative Valuation

AEP's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, AEP is overvalued; if below, it's undervalued.

Historical Valuation

American Electric Power Company Inc (AEP) is now in the Fair zone, suggesting that its current forward PE ratio of 18.60 is considered Fairly compared with the five-year average of 17.08. The fair price of American Electric Power Company Inc (AEP) is between 95.08 to 111.19 according to relative valuation methord.

Relative Value

Fair Zone

95.08-111.19

Current Price：111.02

Fair

18.60

Trailing

Forward

12.57

EV/EBITDA

American Electric Power Company Inc. (AEP) has a current EV/EBITDA of 12.57. The 5-year average EV/EBITDA is 11.69. The thresholds are as follows: Strongly Undervalued below 10.27, Undervalued between 10.27 and 10.98, Fairly Valued between 12.40 and 10.98, Overvalued between 12.40 and 13.11, and Strongly Overvalued above 13.11. The current Forward EV/EBITDA of 12.57 falls within the Overvalued range.

20.01

EV/EBIT

American Electric Power Company Inc. (AEP) has a current EV/EBIT of 20.01. The 5-year average EV/EBIT is 20.02. The thresholds are as follows: Strongly Undervalued below 16.97, Undervalued between 16.97 and 18.49, Fairly Valued between 21.54 and 18.49, Overvalued between 21.54 and 23.06, and Strongly Overvalued above 23.06. The current Forward EV/EBIT of 20.01 falls within the Historic Trend Line -Fairly Valued range.

2.76

American Electric Power Company Inc. (AEP) has a current PS of 2.76. The 5-year average PS is 2.47. The thresholds are as follows: Strongly Undervalued below 1.96, Undervalued between 1.96 and 2.21, Fairly Valued between 2.73 and 2.21, Overvalued between 2.73 and 2.98, and Strongly Overvalued above 2.98. The current Forward PS of 2.76 falls within the Overvalued range.

8.66

P/OCF

American Electric Power Company Inc. (AEP) has a current P/OCF of 8.66. The 5-year average P/OCF is 7.98. The thresholds are as follows: Strongly Undervalued below 6.49, Undervalued between 6.49 and 7.23, Fairly Valued between 8.72 and 7.23, Overvalued between 8.72 and 9.46, and Strongly Overvalued above 9.46. The current Forward P/OCF of 8.66 falls within the Historic Trend Line -Fairly Valued range.

-27.41

P/FCF

American Electric Power Company Inc. (AEP) has a current P/FCF of -27.41. The 5-year average P/FCF is -16.95. The thresholds are as follows: Strongly Undervalued below -247.33, Undervalued between -247.33 and -132.14, Fairly Valued between 98.24 and -132.14, Overvalued between 98.24 and 213.43, and Strongly Overvalued above 213.43. The current Forward P/FCF of -27.41 falls within the Historic Trend Line -Fairly Valued range.

American Electric Power Company Inc (AEP) has a current Price-to-Book (P/B) ratio of 1.99. Compared to its 3-year average P/B ratio of 1.89 , the current P/B ratio is approximately 5.20% higher. Relative to its 5-year average P/B ratio of 1.95, the current P/B ratio is about 1.91% higher. American Electric Power Company Inc (AEP) has a Forward Free Cash Flow (FCF) yield of approximately -6.12%. Compared to its 3-year average FCF yield of -4.70%, the current FCF yield is approximately 30.21% lower. Relative to its 5-year average FCF yield of -5.20% , the current FCF yield is about 17.84% lower.

1.99

P/B

Median3y

1.89

Median5y

1.95

-6.12

FCF Yield

Median3y

-4.70

Median5y

-5.20

Competitors Valuation Multiple

The average P/S ratio for AEP's competitors is 2.65, providing a benchmark for relative valuation. American Electric Power Company Inc Corp (AEP) exhibits a P/S ratio of 2.76, which is 4.15% above the industry average. Given its robust revenue growth of 11.09%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

AEP.O

American Electric Power Company Inc

Performance Decomposition

Market capitalization of AEP increased by 9.26% over the past 1 year. The primary factor behind the change was an increase in Margin Expansion from 7.48 to 25.33.

The secondary factor is the Revenue Growth, contributed 11.09%to the performance.

Overall, the performance of AEP in the past 1 year is driven by Margin Expansion. Which is more sustainable.

11.09%

4.58B → 5.09B

Revenue Growth

238.64%

7.48 → 25.33

Margin Expansion

-240.47%

-11.59 → 16.28

P/E Change

9.26%