Arlington, Virginia-based The AES Corporation (AES) operates as a power generation and utility company. Valued at a market cap of $10.6 billion, the company operates through four segments: Renewables, Utilities, Energy Infrastructure, and New Energy Technologies, and owns or operates power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries.
Companies with a market cap of $10 billion or more are typically referred to as “large-cap stocks.” AES fits squarely into that category, with its market cap exceeding this threshold and reflecting its substantial size and influence in the diversified utilities industry.
However, the stock currently trades 16% below its 52-week high of $17.65 recorded on Feb. 27. AES has risen 1.4% over the past three months, outperforming the State Street Utilities Select Sector SPDR ETF’s (XLU) 9.2% decline during the same time frame.
In the longer term, AES has delivered a similar performance. The stock has grown 13.6% over the past 52 weeks, outperforming the 4.3% decline of XLU over the same period. AES has been trading above its 200-day moving average since last year, indicating long-term bullish momentum, and also above its 50-day moving average since this month.
AES is already on its path to being acquired by Global Infrastructure Partners (GIP), a part of BlackRock, by acquiring all outstanding common shares of AES for $15 in cash, representing a total equity value of approximately $10.7 billion and an enterprise value of approximately $33.4 billion. Following a successful vote by its shareholders confirming this acquisition, management pointed out AES’ flexibility to invest in critical energy solutions as a result of this acquisition, capitalizing on GIP’s deep sector expertise.
When stacked against its rival, Sempra (SRE) has declined 2.4% over the past year, underperforming AES.
Wall Street has an uncertain view of the stock currently. Among the nine analysts tracking AES, the overall consensus stands at a “Hold.” Its mean price target of $15 suggests a 1.1% upside potential from current price levels.
