The AES AES
United StatesUtilities · Utilities - DiversifiedUSD
15.00 USD (+0.5%)
8 analysts
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The AES Corporation is a diversified energy company that generates and distributes electricity through a mix of thermal and renewable generation assets, with presence in North America, Latin America, and other regions.
Key points
from its scores- ✓Strong growth8.2
- ✓Attractive dividend7.9
- ✕Little competitive advantage2.8
- ✕Fragile balance sheet3.8
- !Weak share-price trend5.1
AI analysis
bottom line, main risk, context and newsHigh debt and negative cash generation are serious risks in a rising rate environment, despite the dividend and seemingly cheap valuation.
AES has a highly leveraged financial profile (Net Debt/EBITDA of 7.64) and negative free cash flow conversion (-75.9%), making it vulnerable to rising interest rates in the US. Despite a low P/E (5.59) and an attractive dividend (4.69% net), business quality is weak (ROIC 6.43%) and revenue growth (19.9%) does not translate into cash.
The main risk is extreme leverage (Net Debt/EBITDA of 7.64) combined with negative free cash flow conversion (-75.9%), which in a rising US interest rate environment could compromise financing capacity and the dividend.
Context and risks
AES is a diversified utility with very high net debt (Net Debt/EBITDA of 7.64) and negative free cash flow conversion, making it highly sensitive to the rise in long-term US interest rates (10-year at 5.28%). Additionally, its generation and renewables business depends on external financing and long-term contracts, exposed to a high-rate environment that raises the cost of capital and pressures its valuation.
Is The AES stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades 35% below the Utilities median on average.
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 5.6 | 19.1 | −71% |
| EV / EBITDA | 12.2 | 12.2 | −0% |
| Price / book | 2.2 | 1.9 | +11% |
| Price / sales | 0.8 | 2.6 | −68% |
Sector: median of the 92 Utilities companies analysed. In bold, the multiples used for the comparison.
Valuation score: 5.5 out of 10 (median for Utilities: 4.8).
Average analyst target: 15.00 USD, +0.5% versus the price.
A discount may reflect more risk or slower growth than its sector: Financial health 3.8 (sector 5.8), Growth 8.2 (sector 5.8).
Classic formulas with standard assumptions (0.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Utilities medianValuation
- P/E
- 5.6
- Forward P/E
- 6.3
- EV / EBITDA
- 12.2
- Price / book
- 2.2
- Price / sales
- 0.8
- PEG
- 0.81
- Market cap
- 10.6B USD
- Enterprise value
- 49.6B USD
Profitability
- ROE
- 9.6%
- ROA
- 3.0%
- ROIC (approx.)
- 6.4%
- Gross margin
- 20.3%
- Operating margin
- 18.7%
- Net margin
- 14.3%
- Free cash flow
- −3.1B USD
- FCF yield
- −29.0%
- Cash conversion
- −76%
Solvency
- Total debt
- 32.9B USD
- Net debt
- 31.1B USD
- Cash
- 1.9B USD
- EBITDA
- 4.1B USD
- Net debt / EBITDA
- 7.64
- Debt / equity
- 256.89
- Current ratio
- 0.75
- Quick ratio
- 0.45
Growth
- Revenue growth
- +19.9%
- EPS (TTM)
- 2.67 USD
- EPS (forward)
- 2.37 USD
Dividend
- Dividend yield
- 4.7%
- Payout
- 26.4%
Risk and market
- Beta
- 0.95
- Analyst consensus
- Hold (8)
- Target price
- 15.00 USD
- 52-week range
- 13.21 – 17.65
Recent news
All AES news →Compare it with its sector
All 92 in Utilities →Frequently asked questions about The AES
Is The AES stock cheap or expensive?
On P/E and EV / EBITDA, it trades 35% below the Utilities median on average. Valuation score: 5.5 out of 10 (median for Utilities: 4.8). Average analyst target: 15.00 USD, +0.5% versus the price. This is not investment advice.
What score does The AES get on MeridIAn Screener?
It scores 5.4 out of 10, rank 1,449 of 2,130 (better than 29% of the companies analysed). Its strongest category is Growth (8.2) and its weakest, Quality / Moat (2.8). Analysis of 08/10/2026.
What is The AES's P/E ratio?
Its P/E is 5.6: the share price equals 5.6 times earnings per share over the last 12 months. The Utilities median is 19.1. Based on the earnings analysts expect, the forward P/E is 6.3.
How much is The AES worth on the stock market?
Its market capitalisation is 10.6B USD and its enterprise value, debt included, is 49.6B USD.
How much debt does The AES have?
Its net debt (debt minus cash) is 31.1B USD. That is 7.64 times its EBITDA; the Utilities median is 5.33.
Does The AES pay a dividend?
Yes: its dividend yield is 4.69% and it pays out 26% of its earnings.
How has The AES stock performed over the last year?
It has risen 11.4% over the last year, excluding dividends. Over the last 52 weeks it has traded between 13.21 and 17.65 USD. Past performance does not guarantee future results.
What do analysts think of The AES?
8 analysts cover it; their average recommendation is “Hold” and their average target is 15.00 USD (+0.5% versus the price). It is an estimate, not market data.