American Electric Closes Sale of Racine Hydro Plant; Street Says Buy

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American Electric Power (AEP) disclosed that it has completed the sale of Racine Plant to Eagle Creek Renewable Energy. The plant is a 48-megawatt (MW) hydroelectric facility located in Racine, Ohio.

The deal was initially announced in February 9, 2021, and received approval for transfer by The Federal Energy Regulatory Commission on December 17. The terms of the deal have not been disclosed so far.

The sale is expected to help American Electric focus on regulated business operations, infrastructure and energy innovations.

Notably, upon deal completion, AEP Generation Resources’ only remaining competitive facility is Cardinal Plant’s 595-MW Unit 1, which is scheduled for retirement in 2028.

Analyst’s View

Recently, Morgan Stanley analyst Stephen Byrd maintained a Buy rating on American Electric and raised the price target to $111 from $105. The new price target implies 25.2% upside potential from current level.

Consensus among analysts is a Strong Buy based on 4 unanimous Buys. The average American Electric price target stands at $97.75 and implies upside potential of 10.2%.

Blogger Opinion

TipRanks data shows that financial blogger opinions are 100% Bullish on AEP, compared to the sector average of 70%.

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