The AES Corporation AES is accelerating its renewable energy generation by expanding its solar, wind and battery storage capacities to meet long-term clean energy targets. Simultaneously, the company is increasing its presence in the liquefied natural gas (LNG) market.

However, this Zacks Rank #3 (Hold) company is exposed to risks like a decline in wholesale electricity prices.

Key Growth Drivers for AES

AES continues to expand its clean energy footprint to keep pace with rising electricity demand in its service territories. The company aims to secure at least 4 gigawatts (GW) of power purchase agreements (PPAs) in 2025 and has already signed or been awarded 2.2 GW year to date, including 1.6 GW from data center clients. AES remains on track to achieve its 14-17 GW PPA goal for 2023-2025. It also plans to bring 3.2 GW of new projects online in 2025, having already completed 2.9 GW of construction this year, and currently maintains an 11.1 GW project backlog backed by signed PPAs.

In June 2025, AES wrapped up construction of the 1,000 MW Bellefield 1 project, secured under a 15-year contract with Amazon. Bellefield development is structured in two phases, each delivering 500 MW of solar alongside 500 MW of four-hour battery-based energy storage, for a total combined capacity of 2,000 MW. AES Indiana intends to deploy up to 1,300 MW of solar, wind and battery energy storage by 2027.

AES is broadening its footprint in the expanding liquefied natural gas (LNG) market through targeted infrastructure development. Its Andres unit runs the Dominican Republic’s sole LNG import terminal, serving industrial customers and power plants under long-term agreements. The company is also progressing key projects in Vietnam — the Son My LNG terminal and the 2,250-MW Son My 2 gas facility — which are poised to enhance its global LNG presence over the long term.

Obstacles to AES’ Growth

Wholesale electricity prices have dropped sharply in recent years due to increased renewable energy adoption, plentiful natural gas supplies and demand-side management efforts. New power purchase agreements for renewable projects are now being executed at significantly lower rates than in previous years. This continuing downward trend could weigh on AES’ financial performance.

As of Sept. 30, 2025, AES had a long-term debt of $26.46 billion and a current debt of $4.39 billion. The company’s cash equivalents, worth $1.76 billion as of Sept. 30, 2025, remained much lower than its long-term and current debt levels.

AES Stock Price Movement

In the past six months, AES shares have climbed 19.7% compared with the industry’s growth of 9.9%.

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Stocks to Consider

Some better-ranked stocks from the same industry are Dominion Energy, Inc. D, NiSource Inc. NI and IDACORP Inc. IDA, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

D’s long-term (three to five years) earnings growth rate is 8.13%. The Zacks Consensus Estimate for its 2025 earnings per share (EPS) stands at $3.40, which calls for a year-over-year jump of 22.7%.

NI’s long-term earnings growth rate is 7.97%. The Zacks Consensus Estimate for its 2025 EPS stands at $1.88, which indicates a year-over-year rally of 7.4%.

IDA’s long-term earnings growth rate is 8.01%. The Zacks Consensus Estimate for its 2025 EPS is pegged at $5.84, which implies a year-over-year rise of 6.2%.

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This article originally published on Zacks Investment Research (zacks.com).

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