Arlington, Virginia-based The AES Corporation (AES) operates as a diversified power generation and utility company. With a market cap of $9.7 billion, the company acquires, develops, owns, and operates renewable energy power plants.
Shares of this clean energy giant have significantly underperformed the broader market over the past year. AES has declined 16.2% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 36.8%. In 2024, AES stock is down 29.4%, compared to the SPX’s 25.7% rise on a YTD basis.
Narrowing the focus, AES’ underperformance looks less pronounced compared to the Utilities Select Sector SPDR Fund (XLU). The exchange-traded fund has gained about 30.2% over the past year. Moreover, the ETF’s 25% gains on a YTD basis outshine the stock’s returns over the same time frame.
On Oct. 31, AES reported its Q3 results and its shares closed down more than 10% in the following trading session. Its adjusted EPS of $0.71 beat Wall Street expectations of $0.60. The company’s revenue was $3.3 billion, failing to meet Wall Street forecasts of $3.6 billion. AES expects full-year adjusted EPS to be between $1.87 and $1.97.
For the current fiscal year, ending in December, analysts expect AES’ EPS to grow 9.7% to $1.93 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 12 analysts covering AES stock, the consensus is a “Strong Buy.” That’s based on eight “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
This configuration is more bullish than two months ago, with six analysts suggesting a “Strong Buy.”
On Nov. 5, Susquehanna Community Financial, Inc. (SQCF) analyst Biju Perincheril kept a “Positive” rating and lowered the price target on AES to $21, implying a potential upside of 54.4% from current levels.
The mean price target of $22.60 represents a 66.2% premium to AES’ current price levels. The Street-high price target of $28 suggests an ambitious upside potential of 105.9%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
