AEP Shares Surge 2.16% on October 7, 8-Day Rally Fueled by Institutional Buying and Strategic Moves

American Electric Power (AEP) shares surged 2.16% on October 7, extending their winning streak to eight consecutive days with a cumulative gain of 9.55%. The stock reached an intraday high of 2.94%, marking its highest level since October 2025. This rally reflects a combination of institutional buying, strategic business moves, and improved market sentiment.

Analyst activity has played a pivotal role in shaping investor confidence. Morgan Stanley raised AEP’s price target to $97.00 on September 23, while CFRA reaffirmed a “Buy” rating on September 19. RBC Capital reiterated an “Outperform” recommendation, citing regulatory clarity and strong fundamentals. However, mixed signals emerged as Seaport Res Ptn cut its FY2024 EPS estimates and StockNews.com downgraded the stock to “Hold,” highlighting short-term operational risks.

Institutional investors have bolstered AEP’s position, with Bollard Group LLC acquiring a $53.35 million stake on September 1 and multiple firms increasing holdings in late September. Ontario Teachers Pension Plan Board’s sale of shares on September 13 was an outlier in an otherwise positive trend. Short interest in AEP shares declined by 46.3% on September 14, signaling reduced bearish speculation.

AEP’s strategic decisions have reinforced its long-term appeal. The sale of its unregulated renewables portfolio to Invenergy for $1.5 billion in August 2025 allowed the company to focus on core regulated operations. A $70 billion capital plan, announced in July, underscores investments in grid reliability and transmission infrastructure. The company also raised its 2025 earnings guidance to $5.75–$5.95 per share, supported by record Q2 results and a 6–8% long-term growth target.

Operational resilience and regulatory clarity have further stabilized investor sentiment. AEP’s 4.2% dividend yield remains attractive, and its swift response to recent power outages mitigated reputational risks. The company’s Return on Equity (ROE) of 8.2% as of August 28 highlights its profitability. Regulatory approvals and legislative actions have provided clarity for future projects, reducing uncertainty in the sector.

Broader market trends, including the emerging tax-credit market for clean energy, indirectly benefit AEP through its regulated infrastructure focus. With 76% institutional ownership, AEP has positioned itself as a stable, dividend-driven asset in a low-interest-rate environment. The stock’s recent performance reflects a balance of short-term volatility and long-term confidence in its strategic direction.