Latest news with #taxcredits
Forbes
4 hours ago
- Business
- Forbes
Buy The Dip In AES Stock?
AES (NYSE:AES), an American utility and power generation firm, experienced a nearly 8% drop in its stock during Tuesday's trading session. This decline follows the introduction of proposed modifications to President Trump's tax plan by Senate Finance Committee Republicans. The proposed adjustments aim to reduce renewable energy incentives, intending to eliminate solar, wind, and other clean energy tax credits by 2028 instead of the 2032 timeline established by the Inflation Reduction Act. These adjustments may affect AES, which derives approximately 52% of its power capacity from renewable sources. Excluding the company's hydropower capacity, which will remain unaffected by the cuts to tax credits, around 29% of AES's capacity comes from renewable resources. Furthermore, the company's forthcoming pipeline of projects is predominantly centered on renewable assets. Other significant renewable energy stocks also witnessed a notable decline on Tuesday. See How The Tax Cuts Impact Solar Major Enphase Energy Despite some favorable aspects for AES's stock, such as the growth in data center partnerships and a low valuation, several concerns remain. We reached our conclusion by assessing the current valuation of AES stock in relation to its operational performance over recent years, as well as its current and historical financial health. Our evaluation of AES through key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience reveals that the company has a very weak operating performance and financial status, as detailed below. However, for those seeking upside with lower volatility than individual stocks, the Trefis High Quality portfolio offers an alternative – it has outperformed the S&P 500 and generated returns exceeding 91% since its inception. When considering what you pay per dollar of sales or profit, AES stock appears inexpensive compared to the broader market. • AES has a price-to-sales (P/S) ratio of 0.7 compared to 3.1 for the S&P 500 • Additionally, it has a price-to-earnings (P/E) ratio of 6.3 in contrast to the benchmark's 26.9 AES's Revenues have experienced a decline over the past few years. • AES's top line has had an average growth rate of 2.5% over the last 3 years (compared to an increase of 5.5% for the S&P 500) • Its revenues have dropped 3.2% from $13 Bil to $12 Bil in the past 12 months (against a growth of 5.5% for the S&P 500) • Furthermore, its quarterly revenues decreased 5.2% to $2.9 Bil in the latest quarter from $3.1 Bil a year prior (versus a 4.8% improvement for the S&P 500) AES's profit margins are around the average level for companies in the Trefis coverage universe. • AES's Operating Income for the last four quarters was $1.8 Bil, representing a moderate Operating Margin of 15.2% • AES's Operating Cash Flow (OCF) during this period was $3.0 Bil, indicating a moderate OCF Margin of 24.8% (compared to 14.9% for the S&P 500) • In the last four-quarter period, AES's Net Income reached $1.3 Bil – reflecting a moderate Net Income Margin of 10.7% (compared to 11.6% for the S&P 500) AES's balance sheet appears very weak. • AES's Debt stood at $31 Bil at the end of the latest quarter, while its market capitalization is $7.5 Bil (as of 6/17/2025). This results in a poor Debt-to-Equity Ratio of 375.6% (compared to 19.4% for the S&P 500). [Note: A low Debt-to-Equity Ratio is preferred] • Cash (including cash equivalents) accounts for $1.8 Bil of the total $49 Bil in AES's Total Assets. This yields a low Cash-to-Assets Ratio of 3.7% AES stock has underperformed significantly against the benchmark S&P 500 index during several recent downturns. While investors hope for a soft landing for the U.S. economy, what might happen if another recession occurs? Our dashboard How Low Can Stocks Go During A Market Crash illustrates how key stocks performed during and after the last six market crashes. • AES stock plummeted 57.5% from a high of $29.27 on 13 December 2022 to $12.45 on 6 October 2023, in contrast to a peak-to-trough decline of 25.4% for the S&P 500 • The stock has not yet returned to its pre-Crisis high • The highest the stock has achieved since then is 21.77 on 30 May 2024 and is currently trading at around $10.50 • AES stock fell 54.5% from a high of $21.03 on 18 February 2020 to $9.56 on 18 March 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500 • The stock fully recovered to its pre-Crisis peak by 11 November 2020 • AES stock declined 79.5% from a high of $23.90 on 23 May 2007 to $4.91 on 9 March 2009, versus a peak-to-trough decline of 56.8% for the S&P 500 • The stock completely recovered to its pre-Crisis peak by 5 January 2021 In conclusion, AES's performance across the parameters detailed above is summarized as follows: • Growth: Weak • Profitability: Neutral • Financial Stability: Extremely Weak • Downturn Resilience: Extremely Weak • Overall: Very Weak Consequently, despite its very low valuation, we believe that the stock is unattractive, which reinforces our conclusion that AES is currently a poor investment choice. While it would be wise to steer clear of AES stock for now, you might consider the Trefis Reinforced Value (RV) Portfolio, which has consistently outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to deliver strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks offers a flexible approach to capitalize on favorable market conditions while minimizing losses during downturns, as elaborated in RV Portfolio performance metrics.
Yahoo
10 hours ago
- Business
- Yahoo
Solar stocks, Eli Lilly & Verve, PureCycle: Trending Tickers
Enphase (ENPH), SolarEdge (SEDG), First Solar (FSLR), Sunrun (RUN), Plug Power (PLUG), and Array Technologies (ARRY) plunge after the Senate revealed its revisions to President Trump's tax bill, which included cuts to solar and wind energy tax credits. Eli Lilly (LLY) is set to acquire Verve Therapeutics (VERV), sending Verve's stock skyrocketing. PureCycle Technologies (PCT) stock surges on the company's plans to grow its plastic recycling capacity to 1 billion pounds by 2030. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Now time for some of today's trending tickers. We're watching solar stocks, Eli Lilly and Verve therapeutics, and PureCycle. Let's start with solar stocks. They are dropping again. This is after the Senate unveiled its revisions to Trump's tax bill. The adjusted copy of the bill ending solar and wind energy tax credits facing those incentives out four years earlier than originally intended from 2032 to 2028. This comes at a time when solar energy is seeing less demand, especially with California slashing credits for excess power. And what's interesting is, you know, there was also a pretty strict phase out in the house version of the bill, but there had been some hopes and intensive lobbying happening on the part of those in the industry that there would be more favorable conditions in this Senate version. Lo and behold, Josh, those favorable conditions are not to be found. Yeah. Now lawmakers could still make changes. I mean, the Senate's trying to, you know, pass and send this bill back to the house by by July 4th. We'll see what what happens. But reports do note the odds appear to be fading that lawmakers intend to make changes to preserve credits for residential solar companies. I do see Guggenheim analysts cited saying hoping for a fix continues to be naive, they said. Uh the Senate bill though would rescue a tax credit for nuclear power. So that's news. Yes. At least for now. It gets a later phase out. I mean, we're looking at Plug Power on there as well, hydrogen producer. And the Senate version of the bill gets rid of an incentive that provides um that provides for hydrogen production specifically. I mean, the concern with many of these companies, Plug Power included, is that they will not be able to continue, perhaps even as a going concern, might not be able to continue in business um for some of these companies if they don't have these incentives. Plug Power has come out with some um there has been some talk about Plug Power in that category, but certainly it's going to be a big hit to these companies if it goes through. Also we're expecting a run down 40% there. Uh we are also watching Verve Therapeutics shares. They're soaring after the announcement that Eli Lilly will be buying that gene editing company for up to $1.3 billion. So that was the news. Lily making moves, Bloomberg reminding us, they've been on the hunt. In January, they agreed to pay as much as $2.5 billion for a cancer drug being tested by Scorpion therapeutics. In May, they announced the plan to buy Site One therapeutics for as much as $1 billion. Lily had been collaborating with Verve on its experimental gene editing program for reducing lipoprotein A with this now, of course, Lily would have full control. Yeah. And a couple things to mention here. Why is Lily being so acquisitive? I mean, they got Zepbound, which is a blockbuster. Well, like any big drug company, eventually it's going to lose patent protection for in the case of Zepbound, doesn't happen for a decade. But they're trying to look ahead at these experimental therapies. Secondly, as you mentioned, the specific product that Verve is working on is a cholesterol drug effectively, you know, aiming at improving cardiac health by targeting cholesterol. Um our friend Evan Seegerman over at BMO said that there's already a lot of cholesterol treatments out there. So he was more skeptical about the deal, but other analysts say that this does fit well into the Lily portfolio. So there's a little bit of debate here about whether it's a good deal for Lily, but the shares are down a little bit today. All right. We should get Evan on explaining that thesis. We should. Finally, PureCycle Technologies is reporting that it plans to grow its plastic recycling capacity to 8 billion pounds before 2030. The company designing new solutions to recycling plastics also announcing its executed binding agreements for a $300 million capital raise. The company's projecting Eda of $600 million by that 2030 deadline. This has been an interesting stock. Yeah. Uh it despacked back in 2021. Um and it's also more than doubled over this past year, although it's down from the highs where it was. The cycling tech, surely. Yes, exactly. Yeah. The CEO saying time for growth is now, apparently noting production progress, the Ironton facility, talked about momentum in commercialization efforts, confidence in financing efforts. A couple other things to mention about this one. Uh when it did first despack and it spiked, after that it was accused by investors of misleading them about its technology. The CEO ended up being subpoenad by the SEC in 2021. It was there was a lot of short interest at the time, and I just checked, 30% of the flow of this company is still shorted. So there still appears to be a lot of. And not a ton of coverage on the street. Three buys, two sells. There you go.
Wall Street Journal
a day ago
- Business
- Wall Street Journal
Clean Energy Projects Hinge on Senate Showdown
Democrats and clean energy advocates are ratcheting up pressure on a handful of Republican senators to salvage billions of dollars in projects, ahead of an expected vote next week on President Trump's megabill that targets critical subsidies for elimination. How fast to wind down clean-energy credits is one of several contentious pieces of the tax-and-spending legislation, along with reductions in Medicaid spending, that Republican party leaders need to iron out quickly to hit a July 4 deadline for delivering the bill to Trump's desk. While some Republicans are trying to protect funding for projects in their states, other GOP lawmakers see the subsidies as a ripe target for savings, as the party moves to extend and expand Trump's tax cuts.
CTV News
a day ago
- Business
- CTV News
People with disabilities concerned proposed Liberal bill will increase federal taxes
Nicholas Taylor, 39, of Cooks Brook, N.S., outside of their mother's home in this undated handout photo. HALIFAX — Advocacy groups are asking the federal Liberal government to adjust its proposed tax bill to ensure people with disabilities don't end up paying more to the Canada Revenue Agency. Inclusion Canada says it favours Ottawa lowering the lowest marginal tax rate from 15 to 14 per cent, as proposed in the bill that passed first reading earlier this month. However, the group says the unintended result of the change is that tax credits for people with disabilities will decrease in many cases. That's because the credit — used to reduce taxes payable — is generated by a formula that is tied to the marginal tax rate, and by dropping that rate to 14 per cent, the credit shrinks. Krista Carr, the CEO of Inclusion Canada, said in a telephone interview Monday 'we're really hoping this is something that will be remedied, but as of yet we've not had a response.' The lobby group says without this change, many lower income people with disabilities who rely on the tax credit will be paying about $100 a year more to Ottawa. The March of Dimes, an organization that also works on behalf of people with disabilities, says in a release that families with children with disabilities would lose an average of about $156 per child. The federal Finance Department didn't immediately provide a comment on the groups' request for the change to the bill. The Liberals have said reducing the marginal tax rate will save two-income families up to $840 a year in 2026. Ottawa has also noted that beginning in July eligible Canadians can receive up to $2,400 a year from the Canada Disability Benefit. Carr said people with disabilities will lose money in the tax credits 'that are fundamentally important to them as it helps offset the expenses related to disabilities.' She argues the simple fix is to amend the bill to keep the marginal tax credit rate at 15 per cent, 'just for the calculation of these particular tax credits.' Carr also said tax credits on medical expenses will also be affected, and that could further add to the tax bill for people with disabilities. Nicholas Taylor, a resident of Cooks Brook, N.S., said in an interview Tuesday that the extra $100 in taxes would be roughly equivalent to a month of medication costs. The 39-year-old has polyneuropathy — a condition that where peripheral nerves in the body are damaged — which limits Taylor's mobility and requires the use of a wheelchair. 'For myself, that's a month's worth of medication. I'm diabetic and the blood strips that I have to purchase, they're also about $100 for a package,' Taylor said. With tax payments annually of about $450 on $12,000 in income, Taylor estimates the extra $100 the changes may cost him represents a 25 per cent tax increase. 'We need people with disabilities to be consulted before policies like this are brought in,' Taylor added. This report by The Canadian Press was first published June 19, 2025. By Michael Tutton
E&E News
a day ago
- Business
- E&E News
Fossil fuel booster meets with Republicans on megabill
A fossil fuel advocate briefed Senate Republicans during a meeting at the Capitol on Wednesday, as leadership looks to iron out disagreements over clean energy credits in the GOP megabill. Senate Majority Leader John Thune (R-S.D.) said the issue of energy tax credits 'is not totally settled' after the Finance Committee released text Monday. The legislation targeted wind and solar incentives but extended the runway for other sources like geothermal, hydropower and nuclear. It would also get rid of tax breaks for electric vehicles, rooftop solar and other residential energy-saving incentives. Advertisement Alex Epstein, an author and longtime supporter of fossil fuel expansion, met with Senate Republicans during a lunch. White House chief of staff Susie Wiles was also at the Capitol on Wednesday.
