S&P 500 Gains and Losses Today: AES and Pharma Stocks Soar; Corteva Drops
Reports of a potential acquisition helped shares of a utility company power higher, while an agricultural sciences firm faced pressure after it announced a plan to separate into two independent entities.
This Utility Stock Is Soaring on a Takeover Report. Why It Could Be an AI Play
AES (AES) shares jumped 16% Wednesday afternoon following a report the renewable energy provider is in talks to be acquired by BlackRock's (BLK) Global Infrastructure Partners (GIP).
AES Eyes Best Day Since July on BlackRock Buyout Talks
Shares of AES Corp (NYSE:AES) are 14.7% higher to trade at $15.10 this morning, after the Financial Times broke news that BlackRock (BLK)-owned Global Infrastructure Partners is in the final stages of talks to purchase the utility name.
AES Stock Surges on Takeover Report. Why It Could Be an AI Play for BlackRock's GIP.
The utility company has brokered deals with Big Tech companies like Microsoft, Alphabet, and Meta Platforms in recent years.
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The AES Corporation: Significant Upside Potential Despite Not Considering A Takeover
AES Corporation remains a strong buy, with over 100% upside potential with my fair value estimate of $26 per share. AES's growth is driven by a robust renewables pipeline, strong data center demand, and proactive risk management in US policy and supply chain. AES maintains a comfortable financial position despite high debt, with most debt non-recourse and significant cash reserves.
AES Advances on Strong Renewable Energy Buildout and LNG Expansion
AES expands renewables and LNG operations with major solar, wind and storage projects, lifting shares 20.7% in six months.
AES In An Era Of Durable Data-Center Demand
There are worries that AI native companies will be a threat to SaaS and Enterprise Software companies. The Utilities sector offers a compelling return-on-risk and is insulated from AI threats. AES is well positioned to serve the electricity capacity needs and sustainability goals of the Mag-7.
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AES Still Offers A Risk-Reward Play
I rate AES a speculative Buy for risk-tolerant investors, given deep value, improving margins, and strong renewables/data center tailwinds despite high debt risks. Valuations are extremely low due to debt and operational concerns, but much of the downside is already priced in, limiting further risk unless fundamentals worsen. Renewables expansion and a strong PPA backlog support the case for margin improvement, with dividends and potential takeovers providing additional downside protection.
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AES Corp.: Compelling Buy At 6x PE
AES remains deeply undervalued at 6x forward earnings, offering a 5.4% well-covered dividend yield and significant upside potential. The company is executing a robust renewable energy pipeline, anchored by long-term PPAs with major data center clients like Meta, fueling solid earnings growth. Proprietary technology and efficient project delivery are driving cost savings, while improving debt metrics and steady dividend growth enhance shareholder value.
