Goldman analyst Michael Lapides upgraded American Electric to Buy given attractive valuation, improving free cash flows, strong earnings growth from the transmission segment, and potential capital allocation and upside profitability as the company migrates potentially to a fully regulated business model.

Scotiabank analyst Andrew Weisel lowered the firm's price target on American Electric to $86 from $92 and keeps an Outperform rating on the shares. Interest rates remain stubbornly high, which has weighed on the sector's valuation, the analyst tells investors. The firm views both Canadian and North American utility stocks as undervalued, but sees upside for Canadian utility stocks following their steady underperformance compared to its U.S. peers. Fundamentally, Scotiabank remains bullish on the group's long-term earnings outlook given the tailwinds driving its strong rate base growth.