Arlington, Virginia-based The AES Corporation (AES) operates as a diversified power generation and utility company. With a market cap of $8.9 billion, the company acquires, develops, owns, and operates renewable energy power plants.
Companies worth $2 billion or more are generally described as “mid-cap stocks,” and AES fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the utilities - diversified industry. AES’ diversified energy mix, with 53% from renewables, reduces fuel price volatility and positions it for sustainability. Strategic investments in solar, wind, and energy storage demonstrate its commitment. With operations in 15 countries and stakes in six electric utilities, AES benefits from geographical diversification and operational excellence.
Despite its notable strength, AES slipped 44% from its 52-week high of $22.21, achieved on May 31, 2024. Over the past three months, AES stock has declined 2.5%, underperforming the Utilities Select Sector SPDR Fund’s (XLU) 1.8% gains during the same time frame.
In the longer term, shares of AES dipped 3.4% on a YTD basis and fell 27.9% over the past 52 weeks, considerably underperforming XLU’s YTD gains of 2.3% and 18.7% returns over the last year.
To confirm the bearish trend, AES has been trading below its 200-day moving average since mid-October, 2024. However, the stock is trading above its 50-day moving average since early March.
On Feb. 28, AES shares closed up more than 11% after reporting its Q4 results. Its adjusted EPS of $0.54 surpassed Wall Street expectations of $0.34. The company’s revenue was $3 billion, falling short of Wall Street forecasts of $3.3 billion. AES expects full-year adjusted EPS in the range of $2.10 to $2.26.
AES’ rival, Sempra (SRE) shares lagged behind the stock, with a loss of 20.1% over the past 52 weeks but outpaced the stock with a 1.7% dip on a YTD basis.
Wall Street analysts are moderately bullish on AES’ prospects. The stock has a consensus “Moderate Buy” rating from the 11 analysts covering it, and the mean price target of $15.09 suggests a potential upside of 21.4% from current price levels.
