AES stock continues to fall
While broader utilities are climbing towards a new high, AES (AES) stock continues to fall. It hit a new 52-week low of $10.31 on November 7, 2017. Currently, it’s trading 5% and 7% below its 50-day and 200-day simple moving average levels, respectively. The fair discount to both of these key moving averages highlights weakness in the stock. AES’s 50-day moving average at ~$11.08 will likely act as resistance for the stock going forward.
So far, AES stock has been one of the biggest losers among the S&P 500 Utilities Index (XLU) this year. It has corrected more than 11% year-to-date, while broader utilities have risen 14% during the same period.
Relative strength index
Currently, AES stock has its RSI (relative strength index) at 36. According to technical analysts, the stock is considered to be trading in the “oversold” zone when its RSI falls below 30 levels, and the stock is said to be trading in the “overbought” zone when its RSI rises above 70. The stock might witness a trend reversal when its RSI is at extremes.
To learn about XLU’s chart indicators, read US Utilities: Where the Stocks Might Go from Here.
AES’s earnings in 3Q17
AES reported its 3Q17 earnings on November 2, 2017. It posted earnings of $0.24 per share in 3Q17—compared to its earnings of $0.32 per share in 3Q16. It implies a fall in AES’s earnings of 25% year-over-year. AES’s management has given an earnings guidance range of $1.0 per share–$1.1 per share for fiscal 2017. AES aims to grow its per-share earnings 8%–10% through 2020—way higher than the industry (VPU) average of 4%–6%.