AEP
American Electric Power Company, Inc.
$124.50
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 16.8% above fair value
You pay
$124.50
Bear
$93.24
Fair
$106.56
Bull
$119.88
Bear
$93.24
-25.1%
$6.66 × 14x P/E
Fair
$106.56
-14.4%
$6.66 × 16x P/E
Bull
$119.88
-3.7%
$6.66 × 18x P/E
Adjust Assumptions
16.0x
6.66$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
18.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$140.38
Divergence from AlphaVal
24%
Summary
Applying a 16x P/E to adjusted EPS of $6.66, the base-case value is $106.56 per share. DDM cross-check: $99.37.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples