AES
The AES Corporation
$14.84
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 79.6% below fair value
You pay
$14.84
Bear
$59.57
Fair
$72.81
Bull
$86.05
Bear
$59.57
+301.4%
$4.13 × 18x P/E
Fair
$72.81
+390.6%
$4.13 × 22x P/E
Bull
$86.05
+479.8%
$4.13 × 26x P/E
Key Value Driver
Normalized P/E multiple (22x base case)
Implied Market Multiple
3.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $18.33 from 21 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $72.81 per share.
Warnings
The company's reported profits differ from official accounting profits by 228%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $12.96 (below our primary estimate by 86%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $18.33 (from 21 analysts). Our estimate is 396% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples