AES Corp (NYSE: AES) Receives Positive Endorsement from Mizuho, Plans Strategic Asset Sales
Mizuho has reiterated its Outperform rating on AES Corp (NYSE: AES) with a price target of $24.00, following the recent announcement of the sale of a 30% stake in its AES Ohio utility. This move is part of AES's larger $3.5 billion asset sale program, with the company having divested $2.7 billion of assets since 2023.
The sale of the stake in AES Ohio will help reduce debt at the holding company, which currently carries around $800 million in debt, impacting the company's cash flow. The partnership formed through the sale is expected to provide equity financing for growth projects at the Ohio utility, in anticipation of increased demand in the region by the end of the decade.
AES is focusing on streamlining its portfolio, with plans to sell other assets including LNG and gas-to-power assets, as well as renewable energy operations in South America. The company recently sold a 30% indirect equity interest in its Ohio subsidiary to CDPQ for $546 million, as part of its broader plan to achieve over $2.7 billion from its asset sale target.
Analysts at JPMorgan, Evercore ISI, and Jefferies have maintained positive ratings on AES Corp, recognizing the company's strategic shifts towards US renewables and regulated utilities. In its recent earnings call, AES reported strong financial performance and remains on track to meet its 2024 goals.
InvestingPro Insights highlight AES's market capitalization of $13.69 billion, forward P/E ratio of 17.65, and attractive dividend yield of 3.58%. The company is expected to see net income growth this year, with analysts revising their earnings upwards. Investors should consider AES's operational performance and profitability predictions when evaluating investment opportunities.
In conclusion, AES Corp's strategic asset sales and focus on renewable energy and technological advancements position the company for growth. Investors should monitor AES's financial health and growth prospects, as the company continues to make strategic moves in the utility sector.