AES Offers a Speculative Buy for Risk-Aware Investors

The AES Corporation (NYSE:AES) is a speculative Buy for risk-aware investors. Despite concerns over debt load and operational underperformance, the company offers a risk-reward play for investors willing to ride the volatility.

The AES Corporation (NYSE:AES) has been a subject of interest for risk-aware investors, presenting both challenges and opportunities. Despite concerns over its debt load and operational underperformance, the company's recent financial performance and analyst ratings suggest a potential speculative buy for investors willing to navigate volatility.

In the first quarter of 2025, Mitsubishi UFJ Asset Management Co. Ltd. significantly reduced its stake in AES, selling 354,182 shares, leaving it with approximately 0.10% of the company valued at $8.6 million [1]. This reduction follows a trend of institutional investors making strategic changes to their positions in AES. For instance, Point72 Asset Management L.P. bought a new position worth about $121.6 million, while Ameriprise Financial Inc. grew its position by 35.7% [1].

AES reported earnings of $0.51 EPS for the last quarter, exceeding analysts' expectations, although its revenue declined by 3.0% year-over-year [1]. The company also announced a quarterly dividend of $0.176 per share, reflecting a yield of 5.5%, with a payout ratio of 49.3% [1]. Despite these positive developments, concerns over debt load and operational challenges persist.

Bank of Nova Scotia reduced its position in AES by 68.3%, selling 46,855 shares, now holding 21,725 shares worth approximately $270,000 [2]. Several other institutional investors have also adjusted their positions, with Hexagon Capital Partners LLC growing its position by 33.5% [2].

Analysts have mixed opinions on AES. Susquehanna raised their price target to $16.00 and gave the company a "positive" rating, while Citigroup cut their target to $14.00 and set a "buy" rating [2]. Two analysts have rated the stock with a sell rating, three with a hold rating, six with a buy rating, and two with a strong buy rating, according to MarketBeat [1].

Investors should consider AES as a speculative buy, understanding the risks associated with its debt load and operational underperformance. However, the recent financial performance and analyst ratings suggest potential upside for those willing to navigate the volatility.

References:
[1] https://www.marketbeat.com/instant-alerts/filing-mitsubishi-ufj-asset-management-co-ltd-sells-354182-shares-of-the-aes-corporation-nyseaes-2025-08-12/
[2] https://www.marketbeat.com/instant-alerts/filing-the-aes-corporation-nyseaes-shares-sold-by-bank-of-nova-scotia-2025-08-09/