** Shares of American Electric Power rise 1.3% to $93.50

** AEP late Thurs said it would sell ~20% stake in its transmission business to private equity firm KKR and PSP Investments for $2.82 billion

** KKR says it has formed a partnership with Canada's PSP for the deal, which is expected to close in H2 2025

** However, brokerage Scotiabank cuts PT to $102 from $105 while BMO Capital Markets lowers it by $8 to $100

** Scotiabank says though the deal is immediately accretive to EPS, there is "too much near-term regulatory and financing risk, and see better opportunities elsewhere"

** Jefferies analysts say AEP is unlikely to raise its EPS forecast adding that the funds from operations to total debt ratio (FFO/Debt) benefits of the deal are short-lived

** "The weaker balance sheet metrics remain a persistent investor concern," Jefferies adds

** Of the 22 brokerages that cover the stock, six rate it "buy" or higher, 14 "hold" and two "sell" or lower; their median PT is $100 — LSEG

** AEP stock rose 13.4% in 2024

(Reporting by Vallari Srivastava in Bengaluru)

((Srivastava.Vallari@thomsonreuters.com))