Goldman cuts American Electric Power after 28% run

Goldman Sachs downgraded American Electric Power to neutral from buy, saying the stock's 28% gain over the past 12 months already prices in the utility's recent catalysts. The broader Utilities Select Sector SPDR Fund rose 11% in the same period.

The analysts pointed to AEP's data-center load growth and a constructive Ohio regulatory outcome as factors that have been largely reflected in the share price. The stock now trades at a premium to the sector, leaving less room for upside from here, they said.

AEP's Alpha Score sits at 52 out of 100, a mixed reading that suggests the stock is neither clearly undervalued nor overbought on the firm's proprietary metrics. The utility sector overall has drawn attention this year as power demand forecasts from artificial-intelligence data centers have lifted long-term earnings expectations for regulated electric companies.

Goldman's downgrade follows a period where AEP was one of the top performers in the group. The question now is whether the next leg of the story – actual earnings delivery from those data-center connections – can justify the valuation.