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AES (NYSE:AES) has entered into a long term renewable energy and infrastructure partnership with Google tied to a new data center in Texas.
Under the agreements, AES plans to develop, own, and operate energy facilities that will supply power to the Google data center.
The partnership is expected to affect rural communities near the new facilities through new energy infrastructure and related investment.
For investors watching NYSE:AES, this partnership comes as the stock trades around $16.26 and has gained 60.4% over the past year, while longer 3 year and 5 year returns show declines of 25.0% and 27.2%. The combination of a large technology customer and long term power purchase agreements links AES more closely to data center activity and demand for electricity tied to digital infrastructure.
Looking ahead, the scale and duration of the Google partnership may be relevant for how you think about AES’s project pipeline, contract visibility, and role in US clean energy. A key consideration for investors is how AES manages the process of turning these long term agreements into cash flows while navigating construction, regulatory, and community related execution risks around the new Texas facilities.
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We’ve flagged 3 risks for AES. See which could impact your investment.
⚖️ Price vs Analyst Target: AES trades at US$16.26, roughly 5% above the US$15.54 analyst price target, which is close to consensus.
✅ Simply Wall St Valuation: Shares are described as trading 17.7% below estimated fair value, which screens as undervalued.
✅ Recent Momentum: The 30 day return of about 14.1% suggests buyers have been supportive into this Google partnership news.
There is only one way to know the right time to buy, sell or hold AES. Head to Simply Wall St’s company report for the latest analysis of AES’s Fair Value.
📊 The long term renewable deal with Google ties AES more closely to data center power demand, which could matter for future contracted revenues.
📊 It may be useful to monitor execution of the Texas build out, interest costs, and how new projects feed through to earnings and the current P/E of about 10.7 versus a sector average near 55.9.
⚠️ Interest payments are not well covered by earnings, so higher leverage alongside large new projects could increase financial risk if cash flows are delayed.
