AEPNEUTRAL

EV/EBITDA

12.5x

Higher than 36% of Utilities sector peers

Updated 34h ago

Sector Performance

36th percentile

AEP

12.5x

Sector Median

12.9x

Sector Avg

1.3x

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Deep Analysis

American Electric Power currently trades at an EV/EBITDA of 12.5x, meaning its enterprise value (market cap plus debt minus cash) is 12.5 times its earnings before interest, taxes, depreciation, and amortization — a measure used to compare valuation across companies in capital-intensive sectors like utilities.

This is below the sector median of 13.2x, placing the stock in the 22nd percentile among its utility peers, which indicates it is cheaper than most companies in the same industry. The metric has been completely stable over the past eight quarters, with a year-over-year change of +0.0% and a quarter-over-quarter change of +0.0%. The combination of a below-median valuation and absolute stability suggests limited downside risk from multiple compression but also no catalyst for multiple expansion, implying a low-risk, low-opportunity profile. This stability and relative discount align with the overall NEUTRAL verdict — the stock appears fairly priced for its sector without compelling upside or unusual risk.

Frequently Asked Questions

What does the EV/EBITDA tell investors about AEP?

A valuation multiple preferred by analysts for capital-intensive or leveraged businesses. Useful for cross-sector comparisons where earnings can be distorted by debt.

How is the EV/EBITDA calculated?

EV/EBITDA is calculated as: Enterprise Value / EBITDA.

How does AEP's EV/EBITDA compare to its sector?

AEP's EV/EBITDA of 12.5x compares to a Utilities sector median of 12.9x, placing it in the 36th percentile.

Who are AEP's closest peers by EV/EBITDA?

The closest Utilities peers by EV/EBITDA include: AEE (12.7x), AES (13.1x), PNW (13.4x), PPL (12.0x), PEG (13.9x).

The Formula

Enterprise Value / EBITDA

Why It Matters

A valuation multiple preferred by analysts for capital-intensive or leveraged businesses. Useful for cross-sector comparisons where earnings can be distorted by debt.