Top Analyst Calls Out an Undervalued Utility
Today, we take a break from our typical Top Performer—a long play on a stock experiencing dramatic, news-driven gains—to explore a top “Analyst Action” for the week.
News Quantified monitors dozens of global financial analysis groups, alerting our users when these firms change their ratings (and price targets) for stocks.
What’s more, we force these analysts to “put their money where their mouth is,” by rating each analyst group by Win%: the portion of the time their rating changes result in price movement in the predicted direction.
Our users profit on this information from all sorts of different angles. Whether you buy into their underlying analysis or are simply looking to trade on the momentum generated by market makers, News Quantified’s Analyst Actions offer smaller investors the data they need to compete with big institutional traders.
AEP is a stock that may be familiar to some readers: it’s one of the largest electric utilities in the United States.
Morgan Stanley, meanwhile, stands as one of the highest rated analysts in the News Quantifed system. The venerable financial giant has won on over 68% of its stock rating changes.
They upgraded AEP from an equal portfolio weighting to an “overweight,” raising their price target on the stock from $80 to $83. It currently trades around $76.
Morgan Stanley approves of AEP’s strong balance sheet and proactive decision to invest heavily in wind energy. With a low debt load and solid earnings growth, Morgan analyst Stephen Byrd argued the utility is trading at a substantial discount to its peers. They are currently investing in a more efficient grid transmission system that should further lower costs.
While News Quantified reports on many dramatic news events, we also offer vital intelligence on good old-fashioned value plays—like buying a utility committed to sound, organic growth through profit reinvestment.
Market reaction to Stanley’s upgrade has been muted so far, with AEP up less than 1%. Substantial medium-term upside may remain.
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