Based in Arlington County, Virginia, The AES Corporation (AES) is a diversified power generation and utility company. With a market cap of $11.6 billion, the company generates and transmits energy through its various thermal and renewable power generation facilities and distributes it through its distribution businesses.
Shares of this utility company have significantly underperformed the broader market over the past 52 weeks. AES has declined 15.3% over this time frame, while the broader S&P 500 Index ($SPX) has gained 17.3%. In 2024, shares of AES are down 13.6%, compared to SPX's 10.1% gain on a YTD basis.
Zooming in further, AES’s underperformance becomes more evident when compared to the S&P 500 EW Utilities Invesco ETF’s (RSPU) almost 13% returns over the past 52 weeks and a 12.6% increase on a YTD basis.
Shares of AES Corporation rose marginally on Aug. 1 after its Q2 earnings report due to strong financial performance and positive guidance for 2024. However, the 4.4% drop the following day can be attributed to concerns over the company's lower margins in the Dominican Republic, ongoing operational issues such as the Columbia outage, and the adverse impact of low wind resources in Brazil on its EBITDA.
For the current fiscal year, ending in December, analysts expect AES's EPS to grow 9.1% year over year to $1.92. The company's earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 10 analysts covering the stock, the consensus rating is a “Moderate Buy” That’s based on six “Strong Buy” ratings, one “Moderate Buy,” and three “Holds.”
This configuration is slightly less bullish than three months before, with 7 analysts suggesting a "Strong Buy."
On Aug. 2, Evercore ISI's analyst Durgesh Chopra set a price target of $23 and maintained a “Buy” rating on AES shares. This newly raised target suggests a notable 41.2% potential upside from the current levels.
The mean price target of $22.71 represents a 39.4% premium to AES' current levels. Additionally, the Street-high price target of $25 implies that the stock could rally as much as 53.5% from here.
On the date of publication, Sohini Mondal 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.
