AES Stock Underperforms Industry in 3 Months: How to Play?

The AES Corporation AES shares have gained 2.7% in three months compared with the Zacks Utility-Electric Power industry’s growth of 6.2%. The company is focused on making strategic investments in clean energy solutions such as energy storage and utility-scale renewables, which offer a long-term growth opportunity. AES is also benefiting from the increased demand from data centers, a market that is expanding quickly due to Artificial Intelligence (AI) and cloud computing.

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Other utilities like Ameren Corporation AEE and PPL Corporation PPL are also benefiting from the increased demand from data centers. Shares of Ameren and PPL have gained 13.5% and 11.3%, respectively, during the aforementioned period.

Given AES’ current price performance, should you consider adding the stock to your portfolio right now? Let's examine the factors in detail and assess the investment prospects.

Factors Driving the Performance of AES Stock

Along with using innovation and AI to speed up clean energy improvements, AES is also reaping the benefits of its worldwide diversification, which may result in more stable sales and an operational recovery. AES is also benefiting from the increased demand from data centers, a market that is expanding quickly due to AI and cloud computing. By supplying power from their renewable energy projects, AES secures long-term contracts (Power Purchase Agreements or PPAs) and positions itself as a key partner in the tech industry's expansion.

The company signed or secured new long-term PPAs for four GW of renewables in 2025. It also completed the construction of 3.2 GW of solar, energy storage and wind projects during the year and currently has a project backlog of 12 GW under signed PPAs, including 5.7 GW that is under construction.

In February 2026, AES signed agreements for energy generation projects. AES will benefit from long-term revenue generation, expanded infrastructure development and stronger positioning in the fast-growing data-center energy market. Under the deal, AES signed long-term PPAs to supply electricity for Google’s new data center in Wilbarger County and will develop co-located energy generation, own and operate the power assets, and provide energy management services for the campus.

AES is expanding its presence in the growing liquefied natural gas (LNG) market through strategic projects and infrastructure investments. Its Andres unit operates the Dominican Republic’s only LNG import terminal, supplying industrial users and power plants via long-term contracts.

AES Stock’s Earnings Estimate

The Zacks Consensus Estimate for AES’ 2026 and 2027 earnings per share (EPS) indicates an increase of 2.14% and 1.78%, respectively, year over year. AES’ long-term (three to five years) earnings growth rate is 10.91%.

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The Zacks Consensus Estimate for Ameren’s 2026 and 2027 EPS indicates an increase of 5.57% and 10%, respectively, year over year. AEE’s long-term earnings growth rate is 9.27%. The Zacks Consensus Estimate for PPL’s 2026 and 2027 EPS indicates an increase of 7.73% and 7.97%, respectively, year over year. PPL’s long-term earnings growth rate is 7.34%.

AES Stock’s Earnings Surprise History

The company beat on earnings in two of the trailing four quarters and missed in the other two, delivering an average surprise of 7.64%.

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AES’ Dividend History

The consistently strong performance of the company has enabled it to reward its shareholders through annual dividend rate hikes. On Dec. 5, 2025, its board of directors declared a quarterly common stock dividend of 17.595 cents per share. The company’s current dividend yield of 4.95% is better than the Zacks S&P 500 composite’s 1.1%. Check AES’ dividend history here.

AES’ Debt Position & Liquidity

Currently, the company’s total debt to capital is 76.66%, higher than the industry’s average of 59.74%.

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The company’s current ratio is 0.77. A current ratio less than one indicates that the company's current liabilities are greater than its current assets, which means it may struggle to meet its short-term obligations.

AES Stock’s Valuation

The company is currently trading at 5.92X, a discount compared to its industry’s 16.76X on a forward 12-month P/E basis.

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What Should an Investor Do?

AES is benefiting from growing demand for clean energy and electricity from data centers, leveraging innovation and long-term PPAs to secure stable revenues and support global expansion. The company is also strengthening its growth outlook through renewable project development and strategic investments in energy infrastructure and the LNG market.

However, the company’s higher debt ratio and lower current ratio are concerning at the moment. New investors may want to wait for a better entry point, while existing shareholders of this Zacks Rank #3 (Hold) stock can continue to benefit from regular dividends and rising earnings estimates. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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PPL Corporation (PPL): Free Stock Analysis Report

Ameren Corporation (AEE): Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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