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American Electric Power (AEP) Stock Sinks As Market Gains: What You Should Know

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American Electric Power (AEP - Free Report) closed the most recent trading day at $92.01, moving -0.63% from the previous trading session. This move lagged the S&P 500's daily gain of 1.76%. Elsewhere, the Dow gained 1.17%, while the tech-heavy Nasdaq added 3.03%.

Coming into today, shares of the utility had gained 1.84% in the past month. In that same time, the Utilities sector lost 1.62%, while the S&P 500 lost 5.94%.

American Electric Power will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.27, up 4.1% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.77 billion, up 3.73% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.32 per share and revenue of $19.53 billion, which would represent changes of +4.52% and -0.36%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for American Electric Power. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.56% lower. American Electric Power is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, American Electric Power is holding a Forward P/E ratio of 17.39. This valuation marks a premium compared to its industry's average Forward P/E of 17.15.

Investors should also note that AEP has a PEG ratio of 2.85 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Utility - Electric Power industry currently had an average PEG ratio of 2.92 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 145, putting it in the bottom 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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