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AES is a Top Stock Pick for Long-Term Socially Responsible Investing
Morgan Stanley analyst Stephen Byrd updated his list of top rate-of-change stocks, which identifies companies making positive social change while boosting their businesses and stock prices in the long term. AES made the list as the company works towards having no exposure to coal by 2025 and plans to triple capacity for renewable energy by 2027. Byrd cited the company's technology leadership in energy storage and carbon-free electricity as well as its strong financial track record of growing adjusted earnings per share and free cash flow. Despite falling more than 28% year to date, the majority of analysts have buy ratings on AES, with the average price target suggesting a potential 40% rally in the next year.
Investment Details
One of the things that sets AES apart is its commitment to environmentally sustainable practices, making the company a great long-term socially responsible investment. The company is working toward having no exposure to coal by 2025, and it plans to triple its capacity for renewable energy by 2027, giving it one of the largest renewable pipelines in the world. Byrd also mentioned the company's leadership in new technology, including energy storage and carbon-free electricity, as potential catalysts for the stock.
AES has a strong financial track record, with growth in adjusted earnings per share and free cash flow at 9% and 7% compound annual rates, respectively, between 2017 and 2022. Despite falling more than 28% year to date, the majority of analysts have buy ratings on AES, with the average price target suggesting a potential 40% rally in the next year.
AES' Impact on Environment
AES is focused on sustainable environmental practices and has committed to having no exposure to coal by 2025 and tripling its renewable energy capacity by 2027. The company's leadership in new technology, including energy storage and carbon-free electricity, has the potential to drive positive social change while also boosting the business and stock prices in the long term.
Inclusion of Deere, Eastman Chemical, New Fortress Energy and Nu Holdings
Morgan Stanley's list of top ideas for the Americas includes Deere, Eastman Chemical, New Fortress Energy, and Nu Holdings. These companies have all announced socially responsible business plans that could improve performance, particularly in areas like artificial intelligence for food distribution and waste management.
Deere has a product called "Combine Advisor" that helps farmers manage grain loss and quality through AI and hardware. Byrd suggests that this technology could do well given Deere's large market share and history of investing in and adopting digital technology to improve farming. Meanwhile, digital banking platform Nu Holdings stands out from competitors because of its sophisticated underwriting model that uses AI and machine learning to leverage data and improve customer experience and product offerings.
In conclusion, AES's commitment to environmentally sustainable practices and innovative technology leadership make it a top contender for long-term socially responsible investing. By focusing on renewable energy, carbon-free electricity, and energy storage, AES has one of the largest renewable pipelines in the world. The company has also demonstrated impressive financial growth, making it a unique investment opportunity. Additionally, Morgan Stanley's inclusion of Deere, Eastman Chemical, New Fortress Energy, and Nu Holdings also provides exciting, socially responsible investment opportunities that could be impactful in areas like AI for farming and waste management. It is clear that the investment landscape is evolving, with companies increasingly prioritizing environmental, social, and governance (ESG) factors. For new businesses hoping to make a positive social impact while achieving financial success, investing in socially responsible companies like AES and those identified by Morgan Stanley is one way to align values and goals for effective, sustainable growth.
