13 Best Utility Stocks to Buy According to Analysts

3. The AES Corporation (NYSE:AES)

Average estimated analysts’ upside: 42.45%

Number of Hedge Fund Holders: 53

​The AES Corporation (NYSE:AES)’s global business is organized into four segments: Renewables, Utilities, Energy Infrastructure, and New Energy Technologies. The Renewables segment includes solar, wind, hydroelectric, and energy storage facilities. The Utilities segment comprises regulated electricity to residential, commercial, and industrial customers. The Energy Infrastructure segment encompasses thermal generation assets, including natural gas, LNG, coal, and oil-fired plants. The New Energy Technologies segment focuses on digital energy solutions.

The AES Corporation (NYSE:AES) achieved adjusted EBITDA of $2.64 billion in 2024, landing in the lower half of guidance due to weather-related events in Colombia and Brazil, while generating parent free cash flow of $1.1 billion at the midpoint of guidance and record adjusted EPS of $2.14. For 2025, the company expects significant growth with over 60% YoY increase in renewables EBITDA, driven primarily by previous growth in the US renewables portfolio and plans to bring online another 3.2 gigawatts of renewable capacity. The company has initiated 2025 guidance, including adjusted EBITDA of $2.65 billion to $2.85 billion, parent free cash flow of $1.15 billion to $1.25 billion, and adjusted EPS of $2.10 to $2.26.

To strengthen its financial position, The AES Corporation (NYSE:AES) is implementing several strategic actions, including reducing current investment in renewables by $1.3 billion through 2027, focusing on highest risk-adjusted return projects, and implementing organizational efficiency measures that will yield approximately $150 million in cost savings in 2025, ramping up to over $300 million in 2026. The company has eliminated the need for issuing new equity during the forecast period while maintaining its dividend and remains committed to maintaining investment-grade credit ratings. Additionally, the company has significantly derisked its portfolio through the sale of 5.2 gigawatts in Brazil, eliminating substantial hydrology, currency, spot price, and floating interest rate risk exposures. We believe the company’s transformation positions it well to succeed in the following years, which makes it one of the best utility stocks to consider in 2025.