AES Corporation Struggles Amid Clean Energy Growth
Financial Performance Shows Underwhelming Results in a Thriving Market
Based in Arlington, Virginia, The AES Corporation (AES) is a key player in power generation and utilities. With a market cap of $9.7 billion, the company focuses on acquiring, developing, owning, and operating renewable energy plants.
Over the past year, AES shares have not kept pace with the broader market. The company’s stock has fallen 16.2%, while the S&P 500 Index ($SPX) has surged nearly 36.8%. So far in 2024, AES stock is down 29.4%, in contrast to the SPX’s gain of 25.7%.
When compared to the Utilities Select Sector SPDR Fund (XLU), AES’ underperformance seems less severe. The ETF has seen a rise of about 30.2% over the last year and has outperformed AES on a year-to-date basis with a 25% gain.
In its Q3 results announced on October 31, AES shares dropped over 10% in the following trading day. The company reported an adjusted EPS of $0.71, exceeding Wall Street’s expectations of $0.60. However, its $3.3 billion revenue fell short of the forecasted $3.6 billion. For the full year, AES projects its adjusted EPS to range between $1.87 and $1.97.
For the fiscal year ending in December, analysts predict a 9.7% increase in AES’ EPS to $1.93 on a diluted basis. Notably, the company has consistently outperformed earnings expectations, beating consensus estimates in each of the last four quarters.
Among the 12 analysts covering AES stock, a consensus rating of “Strong Buy” has emerged. This includes eight ratings of “Strong Buy,” one “Moderate Buy,” and three “Holds.” This outlook is an improvement from two months ago when six analysts suggested a “Strong Buy.”
On November 5, Susquehanna Community Financial, Inc. (SQCF) analyst Biju Perincheril maintained a “Positive” rating while adjusting the price target for AES to $21. This implies a potential upside of 54.4% from the current price. The average price target of $22.60 indicates a 66.2% premium, while the highest target of $28 suggests a remarkable upside potential of 105.9%.
More Stock Market News from Barchart
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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
