The firm said it lowered its rating on the holding company, which operates a portfolio of electricity generation and distribution businesses, as it believes AES has a number of potential catalysts and the stock could be at an inflection point.
"AES shares have been volatile YTD and continue to suffer from weak U.S. gas and power markets, Brazilian hydrology, U.S. dollar strength and cautious emerging market sentiment," JPMorgan said in an analyst note.
"Meanwhile, potential firming PJM capacity prices and related reform, additional Brazilian genco purchased power support, a change of power in Argentina and any increase in exposure to Brazilian power markets via asset purchases could be upcoming catalysts," the note continued.
Shares of AES closed at $13.03 on Thursday afternoon.
Separately, TheStreet Ratings team rates AES CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AES CORP (AES) a HOLD. The primary factors that have impacted our rating are mixed-some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, poor profit margins and a generally disappointing performance in the stock itself."