AES Stock Just Dropped to a Fresh Low, Now What?

Year-over-year, AES is down over 15%

facebook twitter linkedin

The shares of AES Corp (NYSE:AES) are up 2.6% to trade at $23.66 this afternoon, roughly one week after the company increased ownership of AES Andes from 66.98% to 98.13%. The security is extending a bounce off a Jan. 18, annual low of $22.49 to break through a ceiling at the $23.70 level, and reconquer the 20-day moving average. Year-over-year, though, AES remains down 15.4%.

AES 20 Day

The brokerage bunch is firmly bullish towards AES, with all five in coverage calling it a "strong buy." Plus, the 12-month consensus target price of $30.55 is a 28.8% premium to current levels.

The equity sports attractively priced premiums at the moment. This is per AES stock's Schaeffer's Volatility Index (SVI) of 28%, which stands in the low 12th percentile of its annual range, meaning options traders' volatility expectations are low at the moment.

As it stands, AES stock offers a forward dividend of 63 cents, with a dividend yield of 2.74%. In addition, the equity has a forward price-earnings ratio of 14.71, and is now trading at price-sales ratio of 1.55, which is indicative of a decent valuation.

The rest of the AES stock's fundamentals are relatively weak, however. The company has an abysmal balance sheet, with $1.99 billion in cash, and $19.88 billion in total debt. AES has also generated just 1.8% in revenue growth, while its net income fell 55% since 2018. In addition, AES is expected to see another revenue decrease this year, adding to the case that the equity provides far too much risk for the reward potential.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners