Market attention is turning to U.S. power utility AES Corporation, driven by its consistent financial performance and a strategic emphasis on clean energy. Analysts are highlighting the company’s potential, particularly as demand for green power from the rapidly expanding data center sector emerges as a promising long-term growth catalyst.
Analyst Upgrade and Financial Performance
A significant vote of confidence came recently from research firm Argus, which raised its rating on AES shares from “Hold” to “Buy.” The firm set a price target of $18, suggesting substantial upside from current trading levels. This move aligns with the broader analyst consensus, which MarketBeat categorizes as a “Moderate Buy.”
The upgrade follows a solid third-quarter 2025 report. AES posted an adjusted earnings per share (EPS) of $0.75, surpassing analyst forecasts. While revenue of $3.35 billion came in slightly below expectations, net profit showed a clear year-over-year increase. This growth was propelled by tax credits and the contribution of new renewable energy projects. Management has reaffirmed its full-year guidance.
Should investors sell immediately? Or is it worth buying AES?
Strategic Growth Engines: Clean Energy and PPAs
The company’s focused pivot toward renewable energy is yielding tangible results. Its renewables business segment has reported strong EBITDA growth this year. A core part of this strategy involves securing long-term power purchase agreements (PPAs). For 2025, AES is targeting the completion of at least 4 gigawatts (GW) in new PPAs, with 2.2 GW already signed or awarded.
Notably, 1.6 GW of these new contracts are with customers in the data center industry. This burgeoning demand for green electricity to power digital infrastructure was cited by investment bank Jefferies as a key reason for its own positive reassessment of the stock.
Dividend Declaration and Market Perspective
Looking ahead, AES has declared a quarterly dividend of $0.17595 per share, scheduled for payment in February 2026. In recent weeks, the share price has exhibited a modestly positive trend, though it continues to trade within a well-established sideways channel. The next major evaluation by the market will likely hinge on the company’s progress toward its annual targets and further advancements in signing contracts for renewable projects.
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