Based in Arlington County, Virginia, The AES Corporation (AES) is a diversified power generation and utility company. With a market cap of $13.7 billion, the company generates and transmits energy through its various thermal and renewable power generation facilities and distributes it through its distribution businesses.
Companies valued at $10 billion or more are generally considered "large-caps," and AES Corporation fits this criterion perfectly, signifying its substantial size, stability, and influence in the diversified utility industry. Its leadership in renewable energy is highlighted by its portfolio, with over 53% in clean energy sources, positioning the company for success in the growing sustainable energy market.
However, AES shares are trading 14% below their 52-week high of $22.21, which they hit on May 31. Also, the stock has surged marginally over the past three months, underperforming the broader Nasdaq Composite’s ($NASX) 3.3% rise over the same time frame.
In the long term, AES is down marginally on a YTD basis, but the shares have gained 19.7% over the past 52 weeks. In comparison, the NASX has gained 20.4% in 2024 and 36.8% over the past year.
AES has been trading above its 50-day and 200-day moving average since early September, indicating a recent bullish trend.
Despite the grim price momentum, AES stock climbed 1.2% on Sept. 17 after the company announced the sale of a 30% equity stake in AES Ohio to global investment group CDPQ for approximately $546 million, with the deal expected to close in early 2025. This partnership mirrors AES' existing collaboration with CDPQ at AES Indiana and will support AES Ohio's growth plans.
Moreover, on Sept. 11, AES shares surged over 8% after Jefferies initiated coverage with a "Buy" rating and set a price target of $20.
AES Corporation faces strong competition from Unitil Corporation (UTL) in the competitive diversified utility industry. Unitil has outperformed AES with a 14.1% gain on a YTD basis and a 30.1% return over the past year.
Analysts are extremely bullish about AES’s prospects. The stock has a consensus rating of "Strong Buy" from 12 analysts in coverage. The mean price target of $22.12 reflects a 15.8% premium from current price levels.
On the date of publication, Kritika Sarmah 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.
