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

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In the latest trading session, American Electric Power (AEP - Free Report) closed at $85.41, marking a -1.66% move from the previous day. This move lagged the S&P 500's daily gain of 0.3%. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.34%.

Prior to today's trading, shares of the utility had lost 4.37% over the past month. This has lagged the Utilities sector's loss of 2.88% and the S&P 500's loss of 1.21% in that time.

American Electric Power will be looking to display strength as it nears its next earnings release. On that day, American Electric Power is projected to report earnings of $1.27 per share, which would represent year-over-year growth of 4.1%. Our most recent consensus estimate is calling for quarterly revenue of $4.77 billion, up 3.73% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.32 per share and revenue of $19.51 billion. These totals would mark changes of +4.52% and -0.47%, respectively, from last year.

Any recent changes to analyst estimates for American Electric Power should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 1.62% lower within the past month. American Electric Power is currently a Zacks Rank #3 (Hold).

Digging into valuation, American Electric Power currently has a Forward P/E ratio of 16.32. This represents a discount compared to its industry's average Forward P/E of 16.46.

We can also see that AEP currently has a PEG ratio of 2.69. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. AEP's industry had an average PEG ratio of 2.79 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 96, putting it in the top 39% 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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