According to Jefferies, American Electric Power AEP 2011 quarters are rebalancing.
Jefferies reported that it is maintaining its 2011 EPS estimate of $3.10. “Our 2011 EPS estimate assumes the same level of shopping (34% of commercial customers) that management is assuming, and is at the midpoint of AEP's guidance range of $3.00-3.20. Our price target of $37.50 (down from $38.50) is based on our 2012 EPS estimate of $3.15 in conjunction with an 11.9x P/E multiple. The 11.9x multiple is a 10% discount to the group average for our regulated electric utility group. Based on yesterday's closing price of $34.92, this results in 12-month price appreciation and total return potential of 7.4% and 12.7%, respectively, including the company's current dividend yield of 5.3%. Risks: Regulatory risk.”
American Electric Power closed yesterday at $34.92.
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