AES (AES) AI Stock Analysis

• Market Cap: $10.10B
• Dividend Yield: 5.06%
• Average Volume (3M): 14.76M
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.97
• 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: 14,635,991
• 30 Day Avg. Volume: 14,755,644
• 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: 3.13
• Enterprise Value/Gross Profit: 17.28
• Enterprise Value/Ebitda: 10.10
• 1Y Price Target: $16.67
• Price Target Upside: 17.56% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.33
• Revenue Forecast (FY): $12.46B

• Rating: 52 Neutral
• Price Target: $14.50 ▲(2.26% Upside)
• Action: Reiterated Date: 03/20/26
• Date: Action: Reiterated 03/20/26

The score is held back primarily by high leverage and structurally weak free cash flow alongside weak technical momentum. This is partially offset by an undemanding valuation (low P/E and ~5% yield) and a constructive earnings-call outlook driven by renewables growth, contracted PPAs, and reaffirmed guidance.

Positive Factors

Renewables EBITDA growth

A 46% YTD rise in renewables EBITDA signals durable operational scale in clean generation. Sustained organic growth and a near-term capacity expansion increase contracted and merchant optionality, improving long-term earnings diversity and reducing reliance on thermal generation volatility.

Large PPA pipeline

A multi-gigawatt PPA pipeline provides long-dated contracted revenue that enhances cash-flow visibility and project financeability. Securing 4 GW of PPAs materially de-risks future generation cash flows and supports steady returns from renewables over several years.

Data-center project backlog

A sizeable data-center backlog ties AES to creditworthy, long-term customers and predictable demand. This supports sustained utilization of construction capacity, steadier contract-based revenue streams, and deeper customer relationships that can underpin recurring EBITDA.

Negative Factors

High leverage

Very high leverage materially constrains financial flexibility for a capital-intensive utility. A thin equity base amplifies refinancing and interest-rate sensitivity, limits ability to absorb shocks, and increases the cost and complexity of funding large renewables and grid investments over the medium term.

Persistent negative free cash flow

Consistently negative free cash flow despite positive operating inflows means AES relies on external financing to fund capex and dividends. Over time this elevates refinancing needs, curtails deleveraging ability, and creates execution risk if capital markets tighten or project funding becomes more expensive.

Asset and regulatory risks (impairment)

A material impairment tied to a PPA expiration highlights exposure to contract renewals and merchant outcomes. Such asset write-downs and ongoing rate-case uncertainty can reduce earnings visibility, spur further restructuring or closures, and raise the likelihood of future non-cash charges.

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 primarily makes money by selling electricity and related services through two main lines of business: (1) Generation and (2) Utilities. In its Generation business, AES earns revenue by producing electricity from its power plants and selling that electricity into wholesale power markets and/or to customers under bilateral agreements such as long-term power purchase agreements (PPAs) or other contracted arrangements. Under contracted structures, revenue is largely driven by contracted capacity/energy payments and, depending on contract terms, may include pass-throughs for fuel and other variable costs; in merchant/market-exposed arrangements, revenue is more directly linked to market electricity prices and dispatch volumes. In its Utilities business, AES earns revenue from regulated electricity distribution and retail supply to customers in the service territories where it operates utilities. Utility revenues are typically based on customer tariffs and regulated rate structures designed to recover costs and provide an allowed return on invested capital, subject to oversight by local regulators. Across both businesses, AES’s earnings are influenced by factors such as generation mix and availability, fuel and purchased power costs (where applicable), wholesale power prices and demand in markets with merchant exposure, regulatory decisions affecting utility rates and permitted returns, and the performance of long-term contracts and customer relationships. Information on specific partnerships is null.

AES Financial Statement Overview

Summary

Stable revenue base and a sharp earnings rebound in 2023–2024 are offset by high leverage, volatile margins (notably weaker profitability in 2025 vs. 2024), and persistently negative free cash flow in recent years, which increases funding and 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: 14.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 14.18 is below the 20-day moving average (MA) of 15.00, below the 50-day MA of 14.98, and above the 200-day MA of 13.40, indicating a neutral trend. The MACD of -0.36 indicates Positive momentum. The RSI at 38.17 is Neutral, neither overbought nor oversold. The STOCH value of 39.17 is Neutral, 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	$8.58B	3.67	8.00%	5.43%	1.96%	-35.00%
CIG	70 Outperform	$7.11B	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%
SRE	63 Neutral	$62.09B	31.37	5.82%	2.91%	9.07%	-28.58%
BIP	59 Neutral	$16.52B	35.60	9.74%	4.92%	8.14%	―
AES	52 Neutral	$10.10B	10.76	20.40%	5.06%	-1.55%	12.83%

AES Corporate Events

AES Updates Credit Facilities Ahead Planned Ownership Change

On March 13 and March 16, 2026, The AES Corporation amended several key financing agreements with Citibank, Sumitomo Mitsui Banking Corporation and Barclays Bank. The changes affect AES’s main revolving credit facility, a separate credit agreement and a letter of credit arrangement, all of which are central components of the company’s corporate liquidity and banking relationships.

These amendments revise change-of-control provisions so that AES can be directly or indirectly owned by Global Infrastructure Management, EQT Fund Management, Qatar Investment Authority and their affiliated investment vehicles. The move aligns the company’s financing structure with its previously announced merger agreement, helping to reduce closing risk and signaling lender support for the pending private ownership transition and related capital structure changes.

The most recent analyst rating on (AES) stock is a Hold with a $15.00 price target. To see the full list of analyst forecasts on AES stock, see the AES Stock Forecast page.

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.