As of June 18, 2025, AES Corp has a Discounted Cash Flow (DCF) derived fair value of $6.44 per share. With the current market price at $10.53, this represents a potential upside of -38.8%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $13.81 |
| DCF Fair Value (10-year) | $6.44 |
| Potential Upside (5-year) | 31.2% |
| Potential Upside (10-year) | -38.8% |
| Discount Rate (WACC) | 4.3% - 7.8% |
Revenue is projected to grow from $12278 million in 12-2024 to $15392 million by 12-2034, representing a compound annual growth rate of approximately 2.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 12278 | 3% |
| 12-2025 | 11645 | -5% |
| 12-2026 | 12055 | 4% |
| 12-2027 | 12525 | 4% |
| 12-2028 | 12775 | 2% |
| 12-2029 | 13031 | 2% |
| 12-2030 | 13664 | 5% |
| 12-2031 | 14504 | 6% |
| 12-2032 | 14794 | 2% |
| 12-2033 | 15090 | 2% |
| 12-2034 | 15392 | 2% |
Net profit margin is expected to improve from 7% in 12-2024 to 5% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 835 | 7% |
| 12-2025 | 619 | 5% |
| 12-2026 | 641 | 5% |
| 12-2027 | 666 | 5% |
| 12-2028 | 679 | 5% |
| 12-2029 | 693 | 5% |
| 12-2030 | 726 | 5% |
| 12-2031 | 771 | 5% |
| 12-2032 | 786 | 5% |
| 12-2033 | 802 | 5% |
| 12-2034 | 818 | 5% |
with a 5-year average of $4737 million. Projected CapEx is expected to maintain at approximately 39% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 5269 |
| 12-2026 | 5791 |
| 12-2027 | 5862 |
| 12-2028 | 5318 |
| 12-2029 | 4861 |
| 12-2030 | 5019 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 47 |
| Days Inventory | 29 |
| Days Payables | 67 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 5351 | 172 | 3422 | (63) | 1820 |
| 2026 | 7722 | 237 | 4723 | (164) | 2925 |
| 2027 | 7868 | 246 | 4907 | 158 | 2557 |
| 2028 | 7365 | 251 | 5006 | (24) | 2133 |
| 2029 | 6949 | 256 | 5106 | (17) | 1604 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 13.81 | 31.2% |
| 10-Year DCF (Growth) | 6.44 | -38.8% |
| 5-Year DCF (EBITDA) | 44.01 | 318.0% |
| 10-Year DCF (EBITDA) | 38.00 | 260.8% |
Is AES Corp (AES) a buy or a sell? AES Corp is definitely a sell. Based on our DCF analysis, AES Corp (AES) appears to be overvalued with upside potential of -38.8%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $10.53.