Stock Spotlight: AGL Energy Limited (ASX:AGL)
This week's Stock Spotlight is ASX-listed AGL Energy Limited.
About AGL Energy Limited.
AGL Energy Limited engages in the supply of energy and other essential services to residential, business, and wholesale customers in Australia. The company operates through three segments: Customer Markets, Integrated Energy, and Investments. It engages in the retail of electricity and gas; retail of broadband, mobile, and voice services; and provision of solar and energy products and services. The company is also involved in the sale, marketing, and brand activities, as well as operation of customer contact and call centres. In addition, it generates and stores electricity through wind, hydro, solar, and coal and gas-fired plants, as well as grid-scale batteries and other firming technologies; production, storage, and sale of natural gas; and development projects. The company was founded in 1837 and is based in Sydney, Australia.

Source: Yahoo Finance
Key Stats
Key Stats
Source: Yahoo Finance, ASX. Data as of 23/08/24.
Price Performance

Growth Potential
- Higher or sustained pool prices – long-term tailwinds from step change in data centre pipeline
- Energy margins bottom out and could potentially start to improve (higher customer and volume numbers).
- Strong cash flow business which provided flexibility to deploy cash in growth opportunities and capital management.
- On-going focus on cost reductions and digitalisation should support margins.
- Potential capital management initiatives (e.g., buyback).
- Potential favourable changes to the regulatory environment and government policy leading to improved support for the industry.
- Potential corporate activity.
Key Risks
- Increased competitive pressures (potentially from new entrants) leading to margin erosion.
- Cost pressure and fuel supply issues lead to margin erosion.
- Increase in supply leading to depressed prices.
- Regulatory risk (policy uncertainty), such recent regulation in electricity markets [Victorian Default Offer (VDO) and Default Market Offer (DMO)]
- Un-scheduled shutdowns impacting earnings.
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Disclaimer: This article does not constitute financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. As always, do your own research and consider seeking financial, legal and taxation advice before investing.





