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

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

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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.

 

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