Value
7.1/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 9.9 |
| P/S | 9.8 |
| EV/EBITDA | 4.6 |
| Fwd P/E | 9.8 |
| Analyst target | 3.0 |
- ▸Forward P/E: 6.3x
- ▸Attractively valued
AES · Why this verdict
Why The AES (AES) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. People who build TrendMatrix, or entities they control, may hold positions, long or short, in securities it covers, and may trade them at any time. Positions are not disclosed individually. Verdicts are generated by an automated model applied by the same rules to every covered stock, and are not adjusted for any position held by the people who build TrendMatrix. We do not accept payment from issuers for coverage.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
AES is a deeply cheap (6.2x forward P/E) utility with strong growth, but low quality, negative cash conversion and a price 12.0% above the $13.05 analyst target, with earnings due in 3 days.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Forward P/E of 6.2x gives a value score of 7.1 and an attractive valuation versus peers. Valuation breakdown | Forward P/E should stay below 8x as earnings are delivered. | →Stable |
| CounterA very low multiple on a business with negative free cash flow and high leverage may signal market distrust, not a bargain. | ||
The price of $14.83 is above the $13.05 analyst target (upside of -12.0%), with downside of 15.0% and a reward-to-risk of -0.8. Analyst target | Price should ease toward the target, or analysts should lift targets above $14.83. | →Stable |
| CounterAnalyst targets may be stale if investors are rerating the renewables growth story. | ||
Quality score is 3.7, below the 4.0 floor, with an earnings-quality red flag of -165% FCF/NI and no competitive moat. Quality breakdown | FCF/NI should turn positive and quality score rise above 4.0. | →Stable |
| CounterHeavy investment in new renewable capacity depresses free cash flow, and these assets earn contracted returns later. | ||
Renewables generation capacity is 54.0% of the business, a HIGH concentration risk, though growth scores 7.5. Bear case | Quarterly revenue should reach the $3.45B estimate and keep growing. | ↑Improving |
| CounterRenewables are also the main growth driver, and long-term contracts make the cash flows predictable. | ||
AES has two beats and two misses in the last four quarters, and reports in 3 days with falling on-balance volume and a yield-trap warning. Earnings | EPS should beat estimates and momentum score rise above 4.5. | ↑Improving |
| CounterThe average surprise was a positive 33.3%, so misses may be small and the record better than it looks. | ||
Forward P/E of 6.2x gives a value score of 7.1 and an attractive valuation versus peers.
→StableValuation breakdown
- Expectation
- Forward P/E should stay below 8x as earnings are delivered.
CounterA very low multiple on a business with negative free cash flow and high leverage may signal market distrust, not a bargain.
The price of $14.83 is above the $13.05 analyst target (upside of -12.0%), with downside of 15.0% and a reward-to-risk of -0.8.
→StableAnalyst target
- Expectation
- Price should ease toward the target, or analysts should lift targets above $14.83.
CounterAnalyst targets may be stale if investors are rerating the renewables growth story.
Quality score is 3.7, below the 4.0 floor, with an earnings-quality red flag of -165% FCF/NI and no competitive moat.
→StableQuality breakdown
- Expectation
- FCF/NI should turn positive and quality score rise above 4.0.
CounterHeavy investment in new renewable capacity depresses free cash flow, and these assets earn contracted returns later.
Renewables generation capacity is 54.0% of the business, a HIGH concentration risk, though growth scores 7.5.
↑ImprovingBear case
- Expectation
- Quarterly revenue should reach the $3.45B estimate and keep growing.
CounterRenewables are also the main growth driver, and long-term contracts make the cash flows predictable.
AES has two beats and two misses in the last four quarters, and reports in 3 days with falling on-balance volume and a yield-trap warning.
↑ImprovingEarnings
- Expectation
- EPS should beat estimates and momentum score rise above 4.5.
CounterThe average surprise was a positive 33.3%, so misses may be small and the record better than it looks.
Per-dimension breakdown
Quality
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.2 |
| ROA | 2.0 |
| Gross margin | 0.1 |
| Op margin | 7.5 |
| Net margin | 7.2 |
| Current ratio | 3.0 |
| FCF quality | 0.0 |
| Moat | 4.9 |
| Piotroski F | 5.6 |
- ▸Earnings quality RED FLAG: -165% FCF/NI
- ▸No competitive moat
Growth
7.5/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 7.5 |
Momentum
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 6.6 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.1 |
| erm sentiment | 3.9 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.3 |
| quality rank | 6.7 |
| growth rank | 8.3 |
- ▸Attractive P/E vs peers
- ▸Industry growth leader
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.1 |
| support resistance | 1.3 |
| 52w position | 7.5 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.6 |
| days to cover | 8.6 |
| volatility | 10.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| max pain risk | 7.0 |
| beta | 7.5 |
| debt equity | 2.4 |
- ▸High IV: 93%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.7 |
- ▸Strong earnings: 3B/1M
- ▸Earnings today
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (5)
- MOMENTUM:6.3>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.8=NEGATIVE
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.83
Upside
-12.5%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 69, MACD bullish
EdgeSector Rotation — Utilities sector out of favor, value=7.1
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.8=NEGATIVE outcome against Growth at 7.5 and asymmetric R:R of -0.83.
The strongest dimensions are Growth at 7.5, Insider at 7.3, and Value at 7.1; the weakest are Technical at 3.0, Quality at 3.7, and Sentiment at 4.7. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.83 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Multiple
Trip ifForward P/E rises above 10x from current 6.2x.
- P2Price Above Analyst Target
Trip ifPrice exceeds 25% above the $13.05 analyst target, above about $16.30.
- P3Weak Quality Negative Cash Conversion
Trip ifQuality score falls below 3.0 from current 3.7.
- P4Renewables Concentration
Trip ifRenewables capacity share exceeds 65% of total from current 54%.
- P5Mixed Earnings Record Into Report
Trip ifEPS surprise falls below 0% in the next reported quarter.