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Jefferies Initiates Hold on American Electric Power Amidst Decline

A recent report reveals Jefferies has initiated coverage of American Electric Power with a Hold recommendation, indicating a potential 1.27% downside from its current price. Projected revenue and shares owned by institutions show a mixed sentiment, impacting investor outlook.

Date: 
AI Rating:   4

On September 19, 2024, Jefferies initiated coverage of American Electric Power (AEP) with a Hold recommendation. The average one-year price target has been set at $100.86/share, suggesting a 1.27% downside from the latest closing price of $102.16/share. This negative outlook might lead to a decline in investor sentiment and subsequently affect the stock prices negatively.

The report projects a decrease in annual revenue for American Electric Power, estimated at $18,923 million, reflecting a reduction of 3.08%. This anticipated revenue decline may contribute to pessimistic investor perception and could influence stock performance adversely.

Furthermore, the projected annual non-GAAP Earnings Per Share (EPS) stands at 5.69. Although this figure provides insights into the company’s potential profitability, the overall sentiment regarding revenue decrease combined with the initiated coverage may overshadow these EPS figures in terms of impacting stock prices.

Investor sentiment appears clouded as the report highlights an increase in institutional ownership by 3.14%, but this is juxtaposed with mixed adjustments in fund allocations towards AEP. For example, Wellington Management Group Llp decreased its portfolio allocation significantly by 87.89%, representing a considerable sell-off, which can signal to the market an impending weakness in the stock. Conversely, some funds, such as Dodge & Cox, have increased their stakes, indicating some confidence in the company’s future.

The put/call ratio of AEP sits at 0.57, demonstrating a predominantly bullish outlook. However, the overall market response may lean heavily on the recent negative projections expressed in the earnings and revenue forecasts.

Stocks:  AEP