AGL Energy: Strong 2H but headwinds in the medium term

About the author:

Max Vickerson
Author name:
By Max Vickerson
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Date posted:
11 August 2023, 7:00 AM
Sectors Covered:
Industrials, New Energy

  • AGL Energy (ASX:AGL) reported a much stronger 2H23 but it is facing structurally higher costs and capital expenditure. For now higher tariffs are supporting higher earnings but we see headwinds returning in the medium term.
  • It’s possible that the electricity market could tighten further to push prices above their already high levels but we don’t believe this is a sustainable business model.
  • We maintain our HOLD rating with a reduced price target of (login to view) and 12-m potential TSR of -4%.

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