Valued at a market cap of $8.4 billion, The AES Corporation (AES) is a global energy company specializing in diversified power generation and utility services, leveraging thermal and renewable energy sources to provide reliable, affordable, and sustainable electricity. Based in Arlington, Virginia, AES serves residential, commercial, and industrial customers worldwide with a portfolio of 34,596 megawatts and energy solutions tailored for economic growth and sustainability.
AES is expected to unveil its fiscal Q4 earnings results on Monday, Feb. 24. Before the event, analysts anticipate the power company to report a profit of $0.47 per share, down 35.6% from $0.73 per share in the year-ago quarter. However, the company has surpassed Wall Street's bottom-line estimates in the past four quarters. In the last reported quarter, AES exceeded the consensus EPS estimate by a margin of 18.3%.
For fiscal 2024, analysts expect AES to report EPS of $1.95, up 10.8% from $1.76 in fiscal 2023.
AES' shares have dipped 31.2% over the past 52 weeks, underperforming both the S&P 500 Index's ($SPX) 25.5% gain and the Utilities Select Sector SPDR Fund's (XLU) 30.9% increase over the same period.
Despite reporting better-than-expected Q3 adjusted EPS of $0.71 on Oct. 31, shares of AES tumbled 10.8% the next day. Investors reacted negatively to the 4.1% year-over-year revenue decline to $3.3 billion, signaling weaker performance in its energy infrastructure unit. Additionally, operating income dropped 21.4% to $722 million, while interest expenses rose 16.3% to $379 million, signaling increased cost pressures. Furthermore, concerns about profitability arose due to potential challenges in executing its substantial 12.7 GW backlog of power purchase agreements amid rising interest rates and supply chain risks.
Analysts' consensus rating on AES stock is cautiously optimistic, with a "Moderate Buy" rating overall. Out of 13 analysts covering the stock, opinions include eight "Strong Buys," one "Moderate Buy," three "Holds," and one "Moderate Sell." As of writing, AES is trading below the average analyst price target of $17.75.
