AEP Shares Surge Despite Missed Earnings, Long-Term Growth Target Set
American Electric Power (AEP) shares rose by 5.5% today, an unexpected move given that the company missed earnings estimates. Despite this, AEP has set an ambitious target for long-term earnings growth and provided a forecast for full-year 2025 earnings.
AEP's stock price climbed despite reporting GAAP earnings of $1.82 per share, which, while beating analyst forecasts, fell short of expectations. The company's operating earnings of $1.80 per share missed forecasts by $0.01. Quarter-over-quarter, earnings growth was less than 1%.
Looking ahead, AEP has set a new long-term operating earnings growth rate target of 7-9% over the next five years. For full-year 2025, the company expects earnings to be in the upper half of the range: $5.75 to $5.95 per share. Currently, AEP's stock is valued at more than 20 times earnings, with single-digit earnings growth. The company's dividend yield stands at 3.3%.
AEP's stock price increase, despite missing earnings, reflects investor confidence in the company's long-term growth prospects. The new earnings growth target and the 2025 earnings forecast indicate AEP's commitment to driving shareholder value, even as it navigates near-term earnings misses.
