The AES Corporation (NYSE: AES), one of the biggest companies in the Energy and Power section, with activity in 15 countries worldwide, is scheduled to release its fourth-quarter 2020 earnings report on Feb 25, before Wall Street’s opening bell.
“In the past four quarters, The Company’s earnings surpassed the Zacks Consensus Estimate on two occasions and missed on the other two, with the average surprise being 0.76%. According to Zacks Investment Research, based on 4 analysts’ forecasts, the quarter’s consensus EPS forecast is $0.45. The reported EPS for the same quarter last year was $0.35. The estimate for fourth-quarter revenues is pegged at $2.84 billion, which indicates a 16.9% rise from the year-ago quarter’s reported figure, with Rank #3 (Hold).” (Zacks.com)
As we have mentioned in other energy sector analysis and earning reports, in the past quarter and based on Finviz.com” data, the energy sector had the best recovery records, at 25.7%.
There are some important points that AES investors are optimistic about in the upcoming report.
First of all, the cold winter, especially in the US and Canada, the company’s main markets, for sure will raise the electricity demand. On the other hand, many businesses, especially in the service sectors (one of the biggest electricity users), were closed because of more lockdowns , with staying and working at home resulting in more demand for electricity at home.
Finally, as the management has mentioned several times, the company is too much into a greener energy future for the world. What their plans are for that, and how much they can use the government subsidies is likely to be another key point that investors would like to know about.
Technical overview
In the daily chart, after January’s free-fall, price movement went back on the uptrend. Currently, it is trading on its PP ($27.25), with RSI at 53, in line with OBV, both supporting the uptrend. A positive report and breach above R1 at $27.70 could open the doors for its all-time high above $29, seen on Feb. 16. Monday’s low of $25.53 also will be in the spotlight in the case that expectations are missed.
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Ahura Chalki
Regional Market Analyst
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