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AES Corp (AES) Reaches 52-Week High on New LNG Terminal

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The AES Corporation (AES - Free Report) hit a new 52-week high of $14.11 before closing the session a bit lower at $14.01 on Aug 23. Year to date, the stock has delivered an impressive return of about 29.4% compared with the Zacks S&P 500 Composite’s rally of 7.1%.



Over the past 52 weeks, AES Corp’s shares have ranged from a low of $9.87 to a high of $14.11. Average volume of shares traded over the last three months is approximately 6.71 million.

What is Driving AES Corp Higher?

The AES Corp delivered an average positive earnings surprise of 4.61% over the past four quarters. The Zacks Consensus Estimate for 2018 and 2019 earnings moved 12.04% and 8.47% up to $1.21 and $1.32, respectively, year over year.

AES Corp continues to gain from its recently inaugurated AES Colon, a combined cycle power plant with a capacity of 381-megawatt (MW) and its first liquified natural gas (LNG) terminal in Central America. The company plans to incur a capex of $1.15 billion in the project. Once operational, the company’s LNG tank will be recognized as the largest in the Caribbean, which will serve the growing need for natural gas in the Central America and the Caribbean belt.

Also, the company is rapidly expanding its renewable footprint overseas. To this end, it is imperative to mention AES Corp’s Alto Maipo hydroelectric project in Chile. The company expects Alto Maipo project to come online by 2020. Currently, the company aims at assigning 2-3 GW of new Power Purchase Agreements (PPAs) annually for 2019 and 2020. This would result in 7.5 GW of new renewable PPAs getting signed through 2020 and all will be active by 2022.

Again, the company is selling its non-core assets to fund its high margin operations as well as reduce its debt balance. To this end, during the second quarter, AES Corp completed the sale of its entire interest in Masinloc, Philippines and Eletropaulo, Brazil unit for $1.2 billion. The company expects to use proceeds from these divestitures in lowering its outstanding debts.

Zacks Rank & Stocks to Consider

The AES Corp carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same industry are Ameren Corporation (AEE - Free Report) , Algonquin Power & Utilities Corp. (AQN - Free Report) and CMS Energy Corporation (CMS - Free Report) , each carrying a Zacks Rank of #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ameren delivered an average positive earnings surprise of 7.69% in the past four quarters. The Zacks Consensus Estimate for 2018 earnings moved 5.2% up over the past 30 days.

Algonquin Power & Utilities pulled off an average earnings surprise of 36.39% over the last four quarters. The Zacks Consensus Estimate for 2018 earnings has been revised 3% upward over the past 30 days.

CMS Energy came up with an average beat of 8.67% in the trailing four quarters. The consensus Estimates for 2018 earnings moved 0.4% north over the last 30 days.

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