American Electric Power Company (AEP) stock is currently trading at an all-time high. It offers a downside of more than 2% compared to analysts’ median target price of $83.19. It is currently trading at $85.23. Of the total 18 analysts covering AEP, four recommend it as a “strong buy,” six recommend it as a “hold,” and eight recommend it as a “buy.”
AEP stock is currently trading at a forward PE of 20.3x compared to its five-year average valuation of 18x. Utilities (XLU) at large also trade at an average valuation of 18x. Thus, AEP looks to be trading at a significant premium compared to peers as well as its historical average. Consolidated Edison (ED) is trading at a forward valuation of 19.3x, and Exelon (EXC) is trading 16x its forward earnings.
Peer price targets
Exelon stock also offers a flattish to a downward movement against its current market price of $50.53. Wall Street analysts have given EXC a target price of $49.91. Consolidated Edison stock has a median target price of $81.57 against its current market price of $85.16, implying a potential downside of 4.2%.
Utility stocks might get a further boost if investors turn to safe havens amid increasing broader market uncertainty. The Fed has already signaled a pause in interest rate hikes for the rest of the year, which will likely be a big positive for utilities.