American Electric Power (AEP) Weaker quarter but growth outlook still strong

Equity Research 31 July 2026 | 5:49PM EDT

American Electric Power (AEP) Weaker quarter but growth outlook still strong; timing of ERCOT load conversion key; Neutral

AEP 12m Price Target: $150.00 Price: $127.85 Upside: 17.3% NEUTRAL Carly Davenport We update our estimates following American Electric Power’s (AEP, | Goldman Sachs & Co. LLC Neutral) 2Q26 results. AEP delivered constructive updates this Beatriz Abreu, CFA quarter despite the softer print, raising its 2026 EPS guidance to | Goldman Sachs & Co. LLC $6.25-$6.55 (from $6.15-$6.45) and expanding its contracted large load pipeline to 69 GW through 2030, up from 63 GW before. Jaya Patel | Goldman Sachs & Co. LLC Regulatory execution also progressed with constructive settlements in Ohio, Oklahoma, and Texas, while the company successfully de-risked its financing plan by securing $3 bn in equity forwards. Key Data _____________________________________ Market cap: $69.9bn While these updates are constructive and highlight AEP’s strong Enterprise value: $124.4bn 3m ADTV: $663.2mn positioning to capture generational load growth, we maintain our United States Neutral rating, as we remain focused on the timing of ERCOT load Americas Utilities M&A Rank: 3 materialization and on the execution of incremental opportunities GS Forecast __________________________________ to the base plan, which could be implemented in the upcoming 12/25 12/26E 12/27E 12/28E

2027-2031 capital plan update in 3Q26. We revise our numbers to Revenue ($ mn) EBITDA ($ mn) 21,832.0 9,132.0 23,006.2 10,201.4 23,468.6 11,475.7 24,248.4 12,718.8 reflect 2Q26 actuals and our price target increases to $150 from EBIT ($ mn) 5,220.0 5,762.8 6,556.1 7,251.5 EPS ($) $147, implying a total return of 20%. P/E (X) EV/EBITDA (X) FCF yield (%) ( ) Dividend yield (%) 3.5 3.0 3.0 3.1 Key Takeaways from Earnings Net debt/EBITDA (X) 5.3 5.3 5.4 5.5

6/26 9/26E 12/26E 3/27E EPS ($) Main highlight from the quarter was the 2026 EPS guidance raise. GS Factor Profile ______________________________ The main highlight this quarter was the increase in 2026 EPS Growth guidance to $6.25-$6.55 from $6.15-$6.45 previously, driven by strong management confidence in the plan despite the softer print Financial Returns

in 2Q26, as well as a historically strong Q3 and anticipated Multiple

regulatory roll-ins in 2H26. Management reaffirmed the 7-9% Integrated

annual growth rate and the greater than 9% EPS CAGR through 2030 based on the base $78 bn capital plan. When pressed on Percentile 20th 40th 60th 80th 100th

longer-term visibility, management pointed to the ~195 GW of AEP relative to Americas Coverage

active interconnection requests as evidence to the capex AEP relative to Americas Utilities

opportunity into the next decade. Additionally, the $3 bn in equity Source: Company data, Goldman Sachs Research estimates. See disclosures for details. forwards (settling under forward contracts by May 2028) substantially de-risks the financing plan according to management,

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs American Electric Power (AEP)

American Electric Power (AEP) Balance Sheet ($ mn) _______________________________________ NEUTRAL Rating since Jul 16, 2026 12/25 12/26E 12/27E 12/28E Cash & cash equivalents Accounts receivable 2,867.0 3,035.0 3,035.0 3,035.0 Inventory 1,046.0 1,183.0 1,183.0 1,183.0 Ratios & Valuation __________________________________________ Other current assets 1,942.0 2,541.0 2,541.0 2,541.0 12/25 12/26E 12/27E 12/28E Total current assets 6,052.0 7,148.9 6,837.8 6,936.6 P/E (X) Net PP&E 92,374.0 101,258.5 111,475.9 124,824.1 EV/EBITDA (X) Net intangibles EV/sales (X) 4.9 5.4 5.7 5.9 Total investments 0.0 0.0 0.0 0.0 FCF yield (%) (…