Update shared on 07 Nov 2025
Fair value Increased 5.19%The analyst price target for AES has increased by $0.75 to $24.00. Analysts cite an improved fair value and outlook for the utility sector, driven by evolving data center demands and sector outperformance.
Analyst Commentary
Analysts have recently updated their outlook for AES, reflecting changes in both valuation and sector performance as utilities continue to navigate evolving industry trends.
Bullish Takeaways
- Bullish analysts see ongoing sector outperformance as a driver for upward price target revisions. This is particularly noted given recent utility gains relative to the S&P 500.
- Improved confidence in the fair value of AES is tied to the company's exposure to growing data center demand. This boosts expectations for long-term growth in the utility sector.
- Expectations for acceleration in regulated and diversified utilities' business pipelines are strengthening forecasts for both near-term and future earnings.
- Analysts are observing positive developments in interconnection timelines, which may support smoother execution on growth initiatives and infrastructure investments.
Bearish Takeaways
- Bearish analysts remain mindful of potential execution risks tied to the pace and complexity of connecting new data centers to the grid. This could impact realized growth.
- There is continued caution around sector valuation levels following a period of outperformance, with concerns that strengths may now be largely priced in.
- Ongoing uncertainty regarding regulatory changes and regional grid constraints could introduce volatility into AES’s future earnings trajectory.
What's in the News
- BlackRock's Global Infrastructure Partners (GIP) is nearing a $38 billion deal to acquire utility group AES, which would represent one of the largest infrastructure takeovers to date (Financial Times).
- GIP is also in advanced discussions to acquire Macquarie-backed Aligned Data Centers, targeting a $40 billion transaction and showing heightened activity in sectors benefiting from AI and data center growth (Bloomberg).
- Reports indicate that an agreement between BlackRock's GIP and AES could be reached within days, highlighting the advanced stage of talks (Bloomberg).
Valuation Changes
- Fair Value has risen slightly, increasing from $14.46 to $15.21.
- Discount Rate has edged up from 12.32% to 12.50%.
- Revenue Growth has fallen significantly, declining from -0.25% to -1.73%.
- Net Profit Margin has improved, rising from 14.61% to 15.70%.
- Future P/E ratio has increased modestly, moving from 8.40x to 8.59x.
Disclaimer
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