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AES (AES) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

AES (AES) closed the most recent trading day at $17.05, moving -0.93% from the previous trading session. This change lagged the S&P 500's daily loss of 0.3%. At the same time, the Dow lost 0.52%, and the tech-heavy Nasdaq lost 0.14%.

Prior to today's trading, shares of the power company had gained 9.62% over the past month. This has outpaced the Utilities sector's loss of 0.87% and the S&P 500's gain of 2.46% in that time.

Investors will be hoping for strength from AES as it approaches its next earnings release, which is expected to be November 6, 2019. On that day, AES is projected to report earnings of $0.40 per share, which would represent year-over-year growth of 14.29%. Our most recent consensus estimate is calling for quarterly revenue of $2.97 billion, up 4.55% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.34 per share and revenue of $10.82 billion, which would represent changes of +8.06% and +0.75%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for AES. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. AES currently has a Zacks Rank of #3 (Hold).

Investors should also note AES's current valuation metrics, including its Forward P/E ratio of 12.87. For comparison, its industry has an average Forward P/E of 21.07, which means AES is trading at a discount to the group.

We can also see that AES currently has a PEG ratio of 1.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Utility - Electric Power industry currently had an average PEG ratio of 3.82 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 77, putting it in the top 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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