Bank of America Merrill Lynch Reiterates Buy on American Electric Power

Bank of America Merrill Lynch is out with its report today on American Electric Power AEP, reiterating Buy. In a note to clients, Bank of America Merrill Lynch writes, "Overall, we estimate that even without Ohio there is up to $0.40/sh of earnings upside from the modernization of AEP's fleet. We estimate that modest offsets would come from dynamics within AEP's eastern power pool, about $0.06/sh, and lower off-system sales (-$0.05/sh). Even assuming some setbacks in recovery of the Ohio environmental spending and regulatory pushback elsewhere, we believe that the rate base opportunities from the plan will outweigh the potential downsides. We reiterate our Buy rating on AEP." Bank of America Merrill Lynch maintains a $41 PO on AEP. Shares of AEP closed Wednesday at $36.93.