Assessing AES (AES) Valuation After Recent Share Price Dip and Long-Term Performance Trends

AES (AES) stock has caught some attention lately, and investors might be wondering how recent movements add up for the utility giant. Over the past month, shares have dipped about 5%, even though longer-term returns remain positive.

See our latest analysis for AES.

Zooming out, AES’s 1-year total shareholder return sits at 10.9%, a respectable gain even after the recent 5.5% drop in its 1-month share price. However, three- and five-year total returns are still in the red. While momentum has faded a bit lately, the broader trend suggests the company remains resilient but faces lingering challenges from past performance.

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With shares trading about 11% below average analyst targets and a nearly 28% discount to some estimates of intrinsic value, should investors view AES as a bargain, or is the market already factoring in all future growth?

Most Popular Narrative: 10.1% Undervalued

Compared to AES’s last close at $13.75, the most popular narrative assigns a fair value of $15.29, suggesting notable upside potential. This valuation relies heavily on the company’s renewables buildout, regulatory shifts, and transformative demand from data centers that could reshape future earnings.

"AES's leading, long-term pipeline of renewables and energy storage projects, supported by robust, multi-year Power Purchase Agreements (PPAs) with data center and corporate customers, positions the company to capitalize on rapidly rising electricity demand from AI and data centers. This accelerates revenue growth and increases visibility on future cash flows."

Read the complete narrative.

Want to see why analysts put a premium on AES’s future and just how bold the margin expansion assumptions get? One detail in their forecast could be the game-changer for projecting what AES is really worth. Don’t miss how this all stacks up in the narrative.

Result: Fair Value of $15.29 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, significant reliance on fading tax incentives and ongoing supply chain uncertainties could quickly challenge the bullish outlook on AES’s earnings trajectory.

Find out about the key risks to this AES narrative.

Build Your Own AES Narrative

If you want to chart your own path through the numbers or have a different perspective on AES, you can easily craft your own view in just a few minutes. Do it your way

A great starting point for your AES research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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