BMO Stays Bullish on American Electric Power (AEP), Citing Strong Capex Outlook

American Electric Power Company, Inc. (NASDAQ:AEP) is one of the best high-growth utility stocks to buy. On October 16, BMO Capital reiterated an Outperform rating on AEP and lifted the price target from $121 to $127. The updated price target was announced in light of the company’s upcoming Q3 2025 financial results, scheduled for release on October 29.

The investment firm expects Q3 EPS to come in at $1.78, which is less than the median estimates of $1.83 and $1.86 at FactSet and Bloomberg, respectively.

BMO mentioned that American Electric will revise its 5-year financial agenda ahead of the Edison Electric Institute (EEI) conference. The company previously discussed this amendment during the Q2 earnings call, adding that it expected a capital program of $70 billion or higher, suggesting a 30% increase from the existing plan.

BMO noted multiple primary determinants that will shape the potential stock rerating, including the asset portfolio, funding strategy, and the net effect on AEP’s prior long-term EPS CAGR, which ranges from 6% to 8%.

The investment firm anticipates that American Electric will use equity financing for nearly 30%-40% of its additional capex.

American Electric, headquartered in Columbus, Ohio, is a public utility holding company specializing in electricity generation, transmission, and distribution for retail and wholesale customers.

While we acknowledge the potential of AEP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: Dow 20 Stocks List: Ranked By Hedge Fund Bullishness Index and 10 Unstoppable Dividend Stocks to Buy Now.

Disclosure. None.