AES Corporation
AES
$14.73
+0.61%
AES Corporation is a global power company operating in 15 countries with a generation portfolio exceeding 32 gigawatts, encompassing renewable energy, gas, coal, and oil, along with majority ownership of multiple electric utilities. As a diversified independent power producer, AES distinguishes itself through its global scale and integrated utility operations, positioning it as a key player in the energy transition. The current investor narrative centers on a proposed $15 buyout offer that has sparked debate, as it values the company below recent market levels, raising questions about shareholder value and the company's strategic direction amid ongoing renewable energy investments.…
AES
AES Corporation
$14.73
Related headlines
AES 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on AES Corporation's 12-month outlook, with a consensus price target around $19.15 and implied upside of +30.0% versus the current price.
Average Target
$19.15
5 analysts
Implied Upside
+30.0%
vs. current price
Analyst Count
5
covering this stock
Price Range
$12 - $19
Analyst target range
With 5 analysts covering AES, the consensus leans neutral-to-bullish, with ratings including Equal Weight (Morgan Stanley, Barclays), Hold (Jefferies), and Buy (Argus Research). The average target price is not explicitly provided, but based on estimated EPS of $2.62 and a forward P/E of 6.1x, the implied target is ~$16.0, offering about 10% upside from the current $14.58. The distribution shows no strong bearish calls, but recent downgrades (Morgan Stanley from Overweight to Equal Weight, Barclays from Overweight to Equal Weight) suggest caution. The consensus is moderately bullish but with tempered expectations.
The target range, implied by EPS estimates, spans from $2.37 (low) to $2.88 (high), corresponding to price targets of roughly $14.5 to $17.6. The high target assumes successful execution of renewable projects and margin expansion, while the low target factors in regulatory headwinds or project delays. The spread of ~21% indicates moderate uncertainty. Recent rating actions show a shift toward neutrality, with two downgrades in early 2026, reflecting concerns about the buyout offer and growth sustainability. The lack of strong bullish conviction suggests the stock may remain range-bound until clearer catalysts emerge.
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AES Technical Analysis
AES exhibits a mixed long-term trend, with a 1-year price change of +31.0%, indicating a sustained uptrend, yet the current price of $14.58 sits at 59.5% of its 52-week range ($10.98-$17.65), suggesting it is closer to the midpoint than extremes. This positioning implies the stock is neither overextended nor deeply undervalued, reflecting a consolidation phase after the prior year's gains. The 52-week high of $17.65 and low of $10.98 provide clear boundaries, with the current price 17.4% below the high and 32.8% above the low, indicating room for upside if momentum returns.
Short-term momentum is weak, with a 1-month price change of -0.68% and a 3-month change of +1.96%, contrasting sharply with the strong 1-year gain. This divergence suggests a deceleration in momentum, potentially signaling a temporary pullback or consolidation rather than a trend reversal. The relative strength vs. SPY over 1 month is 0.57, indicating underperformance, while the 1-year relative strength of 11.9 shows long-term outperformance, reinforcing the idea of a near-term pause within a broader uptrend.
Key support lies near the 52-week low of $10.98, while resistance is at the 52-week high of $17.65. A breakout above $17.65 would signal renewed bullish momentum and potential for new highs, while a breakdown below $10.98 could indicate a bearish reversal. With a beta of 0.94, AES is slightly less volatile than the market, meaning it may not amplify broad market moves significantly, which is typical for utility stocks and provides some downside protection.
Beta
0.94
0.94x market volatility
Max Drawdown
-19.0%
Largest decline past year
52-Week Range
$12-$18
Price range past year
Annual Return
+11.1%
Cumulative gain past year
| Period | AES Return | S&P 500 |
|---|---|---|
| 1m | +0.5% | +2.0% |
| 3m | +2.4% | +10.6% |
| 6m | +2.9% | +8.3% |
| 1y | +11.1% | +20.4% |
| ytd | -0.6% | +10.2% |
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AES Fundamental Analysis
AES's revenue trajectory shows moderate growth, with Q4 2025 revenue of $3,101 million, up 4.7% year-over-year from $2,962 million in Q4 2024. However, the multi-quarter trend reveals volatility: Q3 2025 revenue was $3,351 million (up from $3,289 million in Q3 2024), while Q2 2025 revenue fell to $2,855 million from $2,942 million in Q2 2024. The Utilities segment contributed $2,099 million in the latest period, indicating that regulated utility operations are a stable core, but growth is uneven, likely due to fluctuating energy prices and project timing. This mixed growth suggests the investment case hinges on renewable expansion and cost management rather than consistent top-line acceleration.
Profitability is positive but variable: net income in Q4 2025 was $322 million, up from $560 million in Q4 2024, with a net margin of 10.4% versus 18.9% a year ago. Gross margin improved to 18.8% from 14.2% in Q4 2024, indicating better cost control, but operating margin fell to 16.5% from 11.1% due to higher expenses. The company remains profitable, but margins are compressed compared to the 22% gross margin seen in Q3 2025, reflecting the lumpy nature of power generation earnings. For the industry, gross margins around 18-22% are typical for independent power producers, so AES is within range.
Balance sheet health is a concern: debt-to-equity is a high 4.40, and free cash flow (FCF) was negative -$1,623 million on a trailing twelve-month basis, with Q4 2025 FCF of -$47 million. The current ratio of 0.77 indicates liquidity pressure, as current liabilities exceed current assets. ROE is 13.8%, decent but supported by high leverage. The negative FCF and high debt levels suggest AES relies on external financing for its capital-intensive renewable projects, increasing financial risk. The FCF yield is negative, underscoring that the company is not generating sufficient cash to cover investments, which could constrain dividend growth or require asset sales.
Quarterly Revenue
$3.1B
2025-12
Revenue YoY Growth
+4.69%
YoY Comparison
Gross Margin
18.77%
Latest Quarter
Free Cash Flow
$-1.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is AES Overvalued?
Since net income is positive (TTM net income of $897 million), the trailing P/E ratio of 11.4x is the primary valuation metric. The forward P/E of 6.1x implies the market expects significant earnings growth, as the forward multiple is nearly half the trailing multiple. This gap suggests optimism about future profitability, likely driven by renewable project completions and cost savings. The PEG ratio is negative (-0.24) due to negative earnings growth expectations, which is a red flag, but the low forward P/E may attract value investors.
Compared to the industry average (not provided, but typical for independent power producers is around 15-20x P/E), AES's trailing P/E of 11.4x appears cheap, potentially a 30-40% discount. The P/S ratio of 0.83x is also low, reinforcing a value profile. However, the high debt and negative FCF justify some discount, as peers with stronger balance sheets command higher multiples. The EV/EBITDA of 13.1x is moderate, suggesting the market is pricing in some recovery but not excessive optimism.
Historically, AES's trailing P/E has ranged from below 4x (in Q3 2025) to over 47x (in Q1 2025), with the current 11.4x near the lower end of its 5-year band. The P/B ratio of 1.48x is also near historical lows (e.g., 7.9x in Q4 2022), indicating the stock is trading at a discount to its own history. This could signal a value opportunity if fundamentals improve, but it may also reflect structural challenges like high leverage and regulatory risks.
PE
11.4x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range -86x~190x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
13.1x
Enterprise Value Multiple
