An independent two-stage DCF analysis by a frontier AI model.
"> Utilities grow earnings by expanding their rate base (assets) and having regulators approve rate hikes. AEP targets 5-7% EPS growth. We model a slightly more conservative 4% cash flow growth to account for regulatory lag and potential pushback on customer bills.
"> 2% represents long-term baseline economic growth and inflation. A utility cannot grow faster than its regional economy forever without infinitely raising rates, so terminal growth must remain modest.
Intrinsic value per share under varying discount rate and terminal growth rate assumptions.
| WACC ↓ / Terminal → | 1.0% | 1.5% | 2.0% | 2.5% | 3.0% |
|---|---|---|---|---|---|
| 1.0% | $43.80 | $21.90 | $14.60 | $10.95 | $8.76 |
| 1.5% | $87.60 | $29.20 | $17.52 | $12.51 | $9.73 |
| 2.0% | $21.90 | $43.80 | $21.90 | $14.60 | $10.95 |
| 2.5% | $21.90 | $87.60 | $29.20 | $17.52 | $12.51 |
| 3.0% | $21.90 | $21.90 | $43.80 | $21.90 | $14.60 |
■ Undervalued vs current price ■ Overvalued vs current price
Disclaimer: The numbers presented on this page are for educational and entertainment purposes only. They are the result of a deterministic mathematical model fed with assumptions generated by an Artificial Intelligence (Gemini 3.1). This does not constitute investment advice. Always conduct your own due diligence before investing in the stock market.