AES Rides on Renewable Expansion & Growing Presence in LNG Space

The AES Corporation AES focuses on increasing its renewable energy generation by adding solar, wind and battery energy storage to meet its long-term clean energy goals. It has also been expanding its footprint in the liquefied natural gas (LNG) market.However, this Zacks Rank #2 (Buy) company faces risks like a decline in wholesale prices.Tailwinds Favoring AESLike other utility providers, AES has been expanding its renewable generation portfolio to gain from the rising demand for electricity in its service areas. In 2024, it completed the construction of 3 gigawatts (GW) of wind, solar, gas and energy storage and expects to add a total of 3.2 GW to its operating portfolio by the end of 2025.To encourage clean energy adoption, AES has been aggressively retiring coal-fired units, lowering carbon emissions from its portfolio. In 2024, the company retired 481 megawatts (MW) of coal generation in Chile and the United States.AES operates LNG import terminals in the Dominican Republic, with 160,000 cubic meters of storage capacity. The company has long-term contracts to supply re-gasified LNG to industrial users and third-party power plants, meeting demand from both industrial and commercial customers.AES completed the construction of a new 670 MW combined-cycle gas plant in Panama. This plant should result in much greater utilization of AES Corp.’s existing LNG regasification and storage tanks in the country.Headwinds Faced by AESWholesale electricity costs have fallen dramatically in recent years due to the growing use of renewable energy supplies, low-cost natural gas and demand-side management. New power purchase agreements for renewable power have been given in many areas at much lower costs than those awarded a few years ago. This downward trend in wholesale pricing is expected to persist, which might have a negative influence on AES' financial performance.As of Dec. 31, 2024, AES had a long-term debt of $25.43 billion and a current debt of $3.59 billion. The company’s cash equivalents, worth $2.04 billion as of Dec. 31, 2024, remained much lower than its long-term and current debt levels.AES Stock Price MovementIn the past month, AES shares have fallen 12.9% compared with the industry’s decline of 1%.Image Source: Zacks Investment ResearchOther Stocks to ConsiderSome other top-ranked stocks from the same industry are CMS Energy Corporation CMS, CenterPoint Energy CNP and NiSource Inc. NI, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.CMS’ long-term (three to five years) earnings growth rate is 7.7%. The company delivered an average earnings surprise of 4.76% in the last four quarters.CNP’s long-term earnings growth rate is 7.5%. The company delivered an average earnings surprise of 0.76% in the last four quarters.NiSource’s long-term earnings growth rate is 7.9%. The company delivered an average earnings surprise of 23.02% in the last four quarters.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NiSource, Inc (NI): Free Stock Analysis Report CMS Energy Corporation (CMS): Free Stock Analysis Report CenterPoint Energy, Inc. (CNP): Free Stock Analysis Report The AES Corporation (AES): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks