AES公司：可再生能源前景黯淡，评级下调至表现不佳

USA | Power & Utilities AES Corp A Renewable Eclipse Cometh: Downgrade toUnderperform We downgrade toUnderperformfollowing the stock's rerating up +15% in thepast week post recent tax bill proposal. Likely decelerating renewable outlookon eventual roll-forward of renewable business for '27+, pricey multiple at ~13xEV/EBITDA, and lingering credit rating uncertainty drive us to drop our PT Post 2027 visibility eroding following 4Q24-1Q25 calls. Downgrade to Underperform from Holdand cut price target by -$1/sh to $9/sh.We downgrade AES following the update of our model toreflect lower post-2027 growth as we reduce our PT for DevCo to $3/sh from $4/sh. The initial draftInflation Reduction Act (IRA) clean energy tax credits phase out seemed less negative than feared, Modestly lower 2026-2027 EBITDA; further reduction to our 2028-2029 projections.We havefurther moderated our outlook for renewables growth beyond 2027, now modeling growthdecelerating beyond 2027 (see note for details) but we continue to believe that future renewabledevelopment value is appropriate, although the quantum is a fair conversation. $3/sh (33%) of ourvaluation is for the 2028+ future development growth, despite funding questions.We continue tobelieve that AES will have a difficult path forward with a constrained balance sheet. Renewables and Stock-specific cash flow constraints and weak credit metrics not fully reflected in the value.The weaker cash flow profile leaves limited room for growth, even in a more favorable tax creditenvironment. AES is managing towards no equity issuance, maintaining the dividend, and robustrenewables growth.The slowing of investment in 2026-2027 compared to the huge ramp-up in the past Source: JEFe, Company Filings,Bloomberg Julien Dumoulin-Smith * | Equity Analyst+1 (281) 774-2066 | jds@jefferies.com The initial tax credits phase out seemedbetter than expected, but does not support run-up in thestock. Our base case already reflects more favorable IRA phase out.Most recent macroeconomictrends including tariffs, and upcoming changes to the IRA with a phase-out of tax credits are allnegative data points, and far from being resolved.Longer-term, we do not foresee a tax phase-out Paul Zimbardo * | Equity Analyst+1 (212) 778-8497 | pzimbardo@jefferies.com Hannah Velasquez * | Equity Associate+1 (347) 982-6038 | hvelasquez@jefferies.com Brian Russo, CFA * | Equity Analyst+1 (212) 778-8559 | brusso@jefferies.com Tanner James, CFA * | Equity Analyst+1 (212) 788-8667 | tjames@jefferies.com Whitney Mutalemwa * | Equity Associate+1 (212) 707-6413 | wmutalemwa@jefferies.com Jamieson Ward, CFA * | Equity Analyst+1 (281) 774-2081 | jamieson.ward@jefferies.com Qudrat Qureshi * | Equity Associate(646) 530-5925 | qqureshi@jefferies.com The Long View: AES Corp Investment Thesis / Where We Differ AES is a multi-national infrastructure company that owns a large renewabledevelopment business, two regulated utilities in the US, as well as ownershipin LNG terminals in the Dominican Republic and Panama. With most of thegrowth focused on US Renewables and US Utilities, as well as the planned fullexit from coal, mainly located internationally, we see the company's earningsmix increasingly weighted towards the US. The company has faced weaker Downside Scenario,$6, -49% Upside Scenario,$14, +20% Base Case,$9, -23% Themore bullish scenario ascribes an 10%discountrate to the renewables developmentcompany (vs 13% base case), applies a +1x P/E premium to the utilities (vs -1x discount), andincludes a 10x EV / EBITDA for hydro (vs -6x base Detailedsum-of-the-parts analysis with 2027base year: EPS for utilities (-1x discount), EV /EBITDA for renewables (10x base +1x premiumfor solar/storage/wind and -3x discount hydro)&energy infrastructure(10x base-2x approx The primary change in the more cautious scenariois removing the entire value attributable to thedevelopment company (DevCo) prospects. We Sustainability Matters Catalysts Top Material Issues: InflationReductionAct(IRA)renewables 1. Carbon Emissions Reduction and Energy Transition:AES is committed to reducing its carbon Creditrating updates from S&P Global,Fitch 2. Renewable Energy Expansion:AES is actively expanding its renewable energy portfolio. 3. Employee and Community Engagements:AES emphasizes the importance of a just transition for its Capacity extension in California for legacy gas: Company Targets: 1. Exit the majority of coal operations in the next couple of years. This timeline has been extended by the 2. Achieve net-zero carbon emissions from electricity sales by 2040.3. Achieve net-zero carbon emissions across the business by 2050. Why are we downgrading now? Stuck in the middle Many may question why we are moving now considering the partially derisked backdrop aroundIRA. We downgrade to Underperform as we already reflect sizably ongoing value in our 'Devco'value for ongoing growth in renewables: we are in fact reducing this to 3.5GWs/y