American Electric Power Company, Inc. (NASDAQ:AEP), a utility giant based in Columbus (WA:CLC), Ohio, with a market capitalization of $51.56 billion, has agreed to a $19 million settlement with the Securities and Exchange Commission (SEC), the company disclosed in a regulatory filing today.
According to InvestingPro data, the company maintains a GOOD financial health score despite operating with a significant debt burden. The settlement resolves an investigation into AEP's connections with Empowering Ohio's Economy, a nonprofit group, and its internal accounting and disclosure controls.
The SEC's inquiry, detailed in AEP's third-quarter report for 2024, revolved around allegations related to the company's dealings with Empowering Ohio's Economy and statements regarding Ohio House Bill 6.
In the settlement, which includes an administrative order dated January 17, 2025, AEP neither admits nor denies the findings but will pay the civil penalty and cease any future violations of the specified federal securities laws. The company's stock, currently trading at $97.15, appears overvalued according to InvestingPro's Fair Value analysis.
AEP had anticipated the penalty and accounted for the full amount in its third-quarter financials of 2024. The company asserts that it has fully cooperated with the SEC throughout the investigation.
The administrative order attached to the SEC filing outlines the terms of the agreement and is incorporated by reference, providing the full context of the settlement.
This resolution closes a chapter for AEP, allowing the company to move forward without the overhang of the SEC's scrutiny. The information for this article is based on a press release statement. For deeper insights into AEP's financial health, governance, and comprehensive analysis, access the detailed Pro Research Report available exclusively on InvestingPro, covering over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, American Electric Power (AEP) reported robust third-quarter operating earnings of $1.85 per share, equating to $985 million. The firm adjusted its 2024 full-year earnings guidance to a range of $5.58 to $5.68 per share and introduced a 2025 operating earnings guidance range of $5.75 to $5.95 per share. AEP's long-term earnings growth rate is projected at 6% to 8%, supported by a $54 billion capital plan for 2025-2029.
In other recent developments, AEP announced the appointment of Trevor I. Mihalik as its new executive vice president and chief financial officer. Mihalik, who brings over three decades of experience in the energy sector, will succeed Chuck Zebula.
On the analyst front, Scotiabank (TSX:BNS) and JPMorgan (NYSE:JPM) downgraded AEP's stock to Sector Perform and Neutral, respectively, adjusting the price target to $102. Meanwhile, BMO (TSX:BMO) Capital initially raised the price target to $108.00, maintaining an Outperform rating.
However, following AEP's weaker-than-expected guidance for 2025, BMO Capital revised the price target down to $104.00, while still maintaining the Outperform rating. These recent developments reflect the company's ongoing financial performance and future growth prospects.
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