AES (AES) AI Stock Analysis

• Market Cap: $10.13B
• Dividend Yield: 5.06%
• Average Volume (3M): 15.08M
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.99
• Revenue Growth: -1.55%
• EPS Growth: 12.83%
• Country: US
• Employees: 9,100
• Sector: Utilities
• Sector Strength: 65
• Industry: Diversified Utilities
• EPS (TTM): 0.81
• Shares Outstanding: 712,558,840
• 10 Day Avg. Volume: 26,423,480
• 30 Day Avg. Volume: 15,084,366
• PEG Ratio: -0.23
• Price to Book (P/B): 1.48
• Price to Sales (P/S): 0.83
• P/FCF Ratio: -6.29
• Enterprise Value/Market Cap: 3.79
• Enterprise Value/Revenue: 3.14
• Enterprise Value/Gross Profit: 17.30
• Enterprise Value/Ebitda: 10.11
• 1Y Price Target: $15.33
• Price Target Upside: 7.81% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.32
• Revenue Forecast (FY): $12.46B

• Rating: 54 Neutral
• Price Target: $14.50 ▲(1.97% Upside)
• Action: Reiterated Date: 03/03/26
• Date: Action: Reiterated 03/03/26

The score is primarily constrained by high leverage and structurally weak free cash flow, alongside bearish technical positioning. These risks are partly offset by attractive valuation (low P/E and high dividend yield) and a constructive outlook from reaffirmed guidance and renewables/backlog strength, with the buyout agreement providing additional support despite the impairment headline.

Positive Factors

Renewables EBITDA Growth

A 46% YTD increase in renewables EBITDA reflects structural growth as AES shifts capacity mix toward low-carbon generation. Sustained EBITDA expansion from renewables improves earnings resilience, reduces fossil exposure over time, and supports durable cash flows from growing clean-energy operations.

Contracted PPA Backlog

A multi-gigawatt pipeline and sizable PPA signings increase revenue visibility and secure long-term cash flows. Large safe‑harbored projects provide tax and financing advantages, while backlog and signed PPAs materially de-risk future generation revenues and support sustained growth in renewables.

Buyout Provides Strategic Flexibility

A consensual private-equity buyout backed by equity financing promises capital flexibility to fund large clean‑energy investments off public-market refinancing cycles. Management continuity pledged in the deal reduces execution risk while enabling longer-term, less quarter-driven strategy execution.

Negative Factors

Very High Leverage

Extremely elevated debt-to-equity materially constrains balance-sheet flexibility and raises refinancing risk across credit cycles. High leverage amplifies earnings volatility, reduces capacity for discretionary investment, and makes the company sensitive to interest-rate and covenant pressures.

Structurally Weak Free Cash Flow

Persistent negative free cash flow despite positive operating inflows indicates heavy capex and working‑capital drains. Structural FCF deficits limit ability to pay down debt, fund dividends or scale projects internally, increasing dependence on external financing over the medium term.

Asset-Level Contract Risk

A large impairment tied to an expiring PPA highlights material asset-level risk when contracts lapse. Renewables growth coexists with legacy generation exposure; inability to renew PPAs creates earnings hits, stranded-asset risk, and forces costly allocation decisions over time.

AES Business Overview & Revenue Model

Company Description

The AES Corporation operates as a diversified power generation and utility company. It owns and/or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. The company also owns and/or operates utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors; and generates and sells electricity on the wholesale market. It uses a range of fuels and technologies to generate electricity, including coal, gas, hydro, wind, solar, and biomass; and renewables, such as energy storage and landfill gas. The company owns and/or operates a generation portfolio of approximately 31,459 megawatts. It has operations in the United States, Puerto Rico, El Salvador, Chile, Colombia, Argentina, Brazil, Mexico, Central America, the Caribbean, Europe, and Asia. The company was formerly known as Applied Energy Services, Inc. and changed its name to The AES Corporation in April 2000. The AES Corporation was incorporated in 1981 and is headquartered in Arlington, Virginia.

How the Company Makes Money

AES generates revenue primarily through the sale of electricity from its power generation facilities. The company operates a mix of renewable energy sources, such as wind and solar, alongside traditional fossil fuel plants, allowing it to serve various markets and adapt to changing energy demands. Key revenue streams include long-term power purchase agreements (PPAs) with utilities and other entities, which provide stable cash flows. Additionally, AES benefits from energy trading and ancillary services, which enhance its revenue potential. Strategic partnerships with governments and other energy companies further bolster its earnings by expanding its operational footprint and facilitating renewable energy projects. The company also pursues opportunities in energy storage and technology solutions, contributing to its growth in the evolving energy landscape.

AES Financial Statement Overview

Summary

Stable revenue and a strong earnings rebound in 2023–2024 are offset by very high leverage and persistently negative free cash flow in most recent years, reducing financial flexibility and increasing funding/refinancing risk.

Income Statement

Revenue has been relatively stable (roughly $9.7B–$12.8B) with modest growth in most years, but profitability has been volatile. Net income swung from losses in 2021–2022 to a sharp recovery in 2023–2024, followed by a much lower 2025 result (with meaningfully weaker operating profitability versus 2024). Margins peaked in 2024 and then compressed in 2025, indicating earnings quality and consistency remain a key concern despite the recent rebound.

Balance Sheet

Leverage is the main constraint: debt-to-equity is very high in most years (roughly ~6.7x to ~10.8x from 2021–2024), implying limited balance-sheet flexibility for a utility. Return on equity improved substantially in 2023–2024, but that strength is amplified by high leverage and a relatively thin equity base. While total debt appears lower in 2025 versus prior years, the overall profile still screens as highly levered and therefore more exposed to refinancing and rate/credit-cycle risk.

Cash Flow

Operating cash generation is generally positive and improved in 2025, but free cash flow is negative in most years (notably large outflows in 2022–2025) after being positive in 2020. Free cash flow relative to net income is consistently weak/negative, signaling heavy capital spending and/or working-capital needs that pressure cash available for debt reduction and shareholder returns. The overall cash picture is supported by operating inflows, but persistent free-cash-flow deficits raise funding risk.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.23B	12.28B	12.68B	12.62B	11.14B
Gross Profit	2.26B	2.32B	2.52B	2.55B	2.71B
EBITDA	3.49B	3.67B	2.53B	1.94B	818.00M
Net Income	949.00M	1.69B	242.00M	-546.00M	-413.00M
Balance Sheet
Total Assets	51.77B	47.41B	44.80B	38.36B	32.96B
Cash, Cash Equivalents and Short-Term Investments	2.25B	1.60B	1.82B	2.10B	1.18B
Total Debt	30.33B	29.02B	26.88B	23.50B	18.70B
Total Liabilities	39.84B	39.70B	38.81B	33.86B	28.40B
Stockholders Equity	6.89B	3.64B	2.49B	2.44B	2.80B
Cash Flow
Free Cash Flow	-1.62B	-4.64B	-4.69B	-1.84B	-214.00M
Operating Cash Flow	4.31B	2.75B	3.03B	2.71B	1.90B
Investing Cash Flow	-3.83B	-6.23B	-6.28B	-5.70B	-3.00B
Financing Cash Flow	-403.00M	3.49B	3.49B	3.62B	741.00M

AES Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AES, the sentiment is Negative. The current price of 14.22 is below the 20-day moving average (MA) of 15.42, below the 50-day MA of 15.00, and above the 200-day MA of 13.31, indicating a neutral trend. The MACD of -0.34 indicates Positive momentum. The RSI at 38.57 is Neutral, neither overbought nor oversold. The STOCH value of 17.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AES.

AES Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELPC	71 Outperform	$8.02B	3.67	8.00%	5.43%	1.96%	-35.00%
CIG	70 Outperform	$7.05B	10.08	14.29%	12.98%	-0.38%	-53.94%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
BIP	59 Neutral	$17.50B	35.60	9.74%	4.92%	8.14%	―
SRE	59 Neutral	$60.88B	31.37	5.82%	2.91%	9.07%	-28.58%
AES	54 Neutral	$10.13B	10.76	20.40%	5.06%	-1.55%	12.83%

AES Corporate Events

AES agrees to $10.7 billion private equity buyout

On March 1, 2026, AES agreed to be acquired by a consortium led by Global Infrastructure Partners and EQT Infrastructure VI, with co-underwriters CalPERS and Qatar Investment Authority, in an all-cash merger valuing AES equity at $10.7 billion, or $15 per share, a 40.3% premium to its 30-day VWAP before July 8, 2025. The deal, unanimously approved by AES’ board and expected to close in late 2026 or early 2027 subject to shareholder and regulatory approvals, is designed to address AES’ substantial post-2027 capital needs while preserving dividends until closing and maintaining AES Indiana and AES Ohio as locally operated regulated utilities.

The consortium plans to fund the purchase entirely with equity, maintain an investment-grade profile and keep customer rates at regulated utilities unaffected, while giving AES greater financial flexibility as a private company to accelerate investments in clean energy, grid and generation assets across the Americas. Concurrently, AES announced leadership changes effective March 2, 2026, naming long-time executive Ricardo Falú as president, with a $950,000 base salary and performance-linked incentives, and appointing veteran AES leader Juan Ignacio Rubiolo as executive vice president and chief operating officer, reinforcing management continuity as the company transitions to private ownership.

The most recent analyst rating on (AES) stock is a Hold with a $16.00 price target. To see the full list of analyst forecasts on AES stock, see the AES Stock Forecast page.

AES Announces Major Impairment on Bulgarian Power Plant

In the fourth quarter of 2025, AES assessed its Maritza power plant in Bulgaria, which operates under a PPA set to expire in May 2026, and decided not to proceed with converting the facility to an alternative fuel source. This decision, combined with the pending expiration of the PPA and uncertainty around securing a new agreement, triggered an impairment review that concluded the plant’s carrying value was no longer fully recoverable, leading AES on January 13, 2026 to determine that a pre-tax impairment charge of $250 million to $325 million should be recognized as of December 31, 2025. The impairment reflects a reduction in the expected future use of the asset beyond the current contract period but is not anticipated to affect Maritza’s ability to meet its obligations or its cash flows under the existing PPA through its May 2026 expiry, with final impairment and related tax impacts to be confirmed in AES’s 2025 annual report filing.

The most recent analyst rating on (AES) stock is a Buy with a $15.50 price target. To see the full list of analyst forecasts on AES stock, see the AES Stock Forecast page.