AES
The AES Corporation
$14.95
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 25.8% below fair value
You pay
$14.95
Bear
$17.64
Fair
$20.16
Bull
$22.68
Bear
$17.64
+18.0%
$1.26 × 14x P/E
Fair
$20.16
+34.9%
$1.26 × 16x P/E
Bull
$22.68
+51.7%
$1.26 × 18x P/E
Adjust Assumptions
16.0x
1.26$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
11.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$18.75
Divergence from AlphaVal
8%
Summary
Applying a 16x P/E to adjusted EPS of $1.26, the base-case value is $20.16 per share. DDM cross-check: $12.96.
Warnings
Dividend-based valuation: $12.96 (below our primary estimate by 36%). Large gaps may signal the dividend doesn't reflect full earning power.
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