The Gabelli Utilities Fund on American Electric Power Co. Inc.
Thesis
AEP has one of the largest U.S. transmission networks and a very large pipeline of contracted and potential electricity demand. Its $78 billion capital program is expected to drive strong rate-base growth, while large-load customers include major hyperscalers and industrial users. Gabelli highlights management's expectation for EPS growth above 9% through 2030.
“AEP's official long-term EPS target is 7%-9% annually but expects to deliver greater than 9% through 2030.”
Key risks
- Regulatory and customer-bill pressure around large-load growth