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AES (AES) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, AES (AES - Free Report) closed at $20.26, marking a +1% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.67%. Meanwhile, the Dow gained 0.74%, and the Nasdaq, a tech-heavy index, added 0.81%.

Coming into today, shares of the power company had gained 6.08% in the past month. In that same time, the Utilities sector gained 1.73%, while the S&P 500 gained 3.55%.

AES will be looking to display strength as it nears its next earnings release. In that report, analysts expect AES to post earnings of $0.38 per share. This would mark year-over-year growth of 5.56%. Meanwhile, our latest consensus estimate is calling for revenue of $2.86 billion, up 9.16% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for AES. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.39% higher. AES currently has a Zacks Rank of #1 (Strong Buy).

Digging into valuation, AES currently has a Forward P/E ratio of 13.74. For comparison, its industry has an average Forward P/E of 19.22, which means AES is trading at a discount to the group.

Meanwhile, AES's PEG ratio is currently 1.51. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AES's industry had an average PEG ratio of 3.67 as of yesterday's close.

The Utility - Electric Power industry is part of the Utilities sector. This group has a Zacks Industry Rank of 160, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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