UPDATE: Bank of America Merrill Lynch Downgrades American Electric Power to Neutral
Bank of America Merrill Lynch is out with its report today on American Electric Power (NYSE: AEP), downgrading AEP from Buy to Neutral.
In its report, Bank of America Merrill Lynch writes, "We are downgrading the shares of AEP to Neutral from Buy following yesterday's Ohio rate settlement, which paves the way for AEP to move from a largely regulated company to an integrated utility. Under the settlement, AEP would shift its Ohio generation into an unregulated subsidiary by 2015. AEP's total earnings following the realignment would be roughly 25%-30% unregulated. We believe this would increase the business risk profile of the company and put AEP into a peer group where valuation multiples are lower."
Bank of America Merrill Lynch has a $40 PO on AEP.
At the time of posting, shares of AEP were trading at $37.57, down 1.75% from Wednesday's close.
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