Deutsche Bank Upgrades American Electric Power (AEP) to Buy

Deutsche Bank upgraded American Electric Power (NYSE: AEP) from Hold to Buy with a price target of $62.50 (unchanged). Analyst Jonathan Arnold thinks upcoming catalyst will underscore utility value.

"We believe AEP has made great strides toward becoming a more predictable, higher quality regulated utility, with improved execution and a clearer strategy in place. We anticipate this trend will continue in 2015 when we expect AEP to exit its merchant generation business, which we see as reducing volatility and allowing for multiple expansion. On our numbers, AEP trades in line with regulated peers absent any value for the generation segment, implying minimal downside even if the sale price or proceeds deployment disappoint. We see a path to premium value for a streamlined, regulated AEP given a clearer path to growth via transmission," said the analyst.

For an analyst ratings summary and ratings history on American Electric Power click here. For more ratings news on American Electric Power click here.

Shares of American Electric Power closed at $56.90 yesterday.

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