The AES Corporation (AES) Buy or Sell Stock Guide

Last updated: Jul 12, '19

Are you looking for the analysis of The AES Corporation (AES) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 8 reasons to buy and 5 reasons to sell AES stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about AES stock:

  • Is AES a buy or a sell?
  • Should I sell or hold AES stock today?
  • Is AES a good buy / investment?
  • What are AES analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy AES stock:

1. AES has utility and generation assets in 17 countries. This diversification reduces country- and region-specific risk.

2. We forecast long-term electricity demand growth for the developing countries in Asia and South America in which AES operates to be well above that of the U.S. and other developed countries.

3. Although drought conditions reduce hydroelectric output in Panama, Chile, Colombia, and Brazil, driving up spot power prices in markets where AES is short power, we expect normal hydrological conditions to eventually return and lift earnings.

4. AES profitability is improving. The YoY profit margin change was 22.23percentage points. See AES profitability chart.

5. AES forward dividend yield is 3.18%, higher than the industry (1.43%) and sector (1.03%) forward dividend yields. See AES forward dividend chart.

6. AES forward P/E ratio is 12.80, and it’s low compared to its industry peers’ P/E ratios. See AES forward P/E ratio chart.

7. AES PEG ratio (P/E adjusted for growth) is 1.73, and it’s low compared to its industry peers’ PEG ratios. See AES PEG chart.

8. AES average analyst rating is Buy. See AES analyst rating chart.

Now that you understand the bull case, let’s look at the reasons to sell AES stock (i.e., the bear case):

1. AES overpaid for the DPL acquisition and has written down the majority of the merchant generation assets that it now intends to retire or sell.

2. Changes in currency will have a material impact on AES Corporation's dollar-denominated earnings and cash flow because of their international exposure.

3. AES Corporation faces above-average political risk because a majority of its assets and development focus are in emerging markets.

4. AES quarterly revenue growth was -3.40%, lower than the industry and sector average revenue growth (3.81% and 4.57%, respectively). See AES revenue growth chart.

5. AES Price/Book ratio is 3.52, and it’s high compared to its industry peers’ P/B ratios. See AES forward Price/Book ratio chart.

Now let's look at the key statistics for AES:

Metrics AES
Price $17.22
Average Price Target / Upside $18.33 / 6.45%
Average Analyst Rating Buy
Industry Utilities - Diversified
Sector Utilities
Number of Employees 21,000
Market Cap $11.48B
Forward P/E Ratio 12.9032
Price/Book Ratio 1.0816
PEG 1.7436
Revenue (TTM) $10.65B
YoY Quarterly Revenue Growth -3.39622641509434%
Profit Margin 6.291079812206572%

What are your thoughts on AES?

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