AGL Energy (AGL) AI Stock Analysis

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AGL Energy

(Sydney:AGL)

Rating:69Neutral

Price Target:

AU$11.50

▲(10.90%Upside)

AGL Energy's solid cash flow performance and strategic growth initiatives contribute positively to its stock score. However, the high P/E ratio and challenges in revenue growth and fleet performance weigh down the overall score. Investment in grid-scale batteries and cost management efforts are promising, but vigilance in managing leverage and improving earnings is crucial.

AGL Energy (AGL) vs. iShares MSCI Australia ETF (EWA)

Market Cap

$6.98B

Dividend Yield5.67%

Average Volume (3M)1.63M

Price to Earnings (P/E)30.1

Beta (1Y)0.29

Revenue Growth15.96%

EPS Growth-40.06%

CountryAU

Employees3,735

SectorUtilities

Sector Strength76

IndustryIndependent Power Producers

Share Statistics

EPS (TTM)0.55

Shares Outstanding672,747,250

10 Day Avg. Volume1,436,574

30 Day Avg. Volume1,625,197

Financial Highlights & Ratios

PEG Ratio-0.47

Price to Book (P/B)1.41

Price to Sales (P/S)0.00

P/FCF Ratio9.69

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$11.75

Price Target Upside13.27% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering5

AGL Energy Business Overview & Revenue Model

Company DescriptionAGL Energy Limited (AGL) is one of Australia's leading integrated energy companies, operating across the energy supply chain. It is involved in the generation, distribution, and retailing of electricity and gas for residential, commercial, and industrial customers. AGL's diverse portfolio includes renewable energy sources such as wind, hydroelectric, and solar, alongside traditional thermal power generation.

How the Company Makes MoneyAGL Energy Limited generates revenue through multiple streams within the energy sector. Primarily, the company makes money by selling electricity and gas to customers across Australia. This includes residential consumers who purchase energy for household use, as well as commercial and industrial clients who require larger quantities of energy. AGL also earns income through its energy generation operations, where it produces electricity from a mix of renewable and non-renewable sources, which is then sold into the national energy market. Additionally, AGL provides energy-related services, such as energy efficiency and management solutions, which contribute to its revenue. The company's earnings are further supported by strategic partnerships and investments in energy infrastructure and technology.

AGL Energy Earnings Call Summary

Earnings Call Date:Feb 11, 2025

(Q2-2025)

% Change Since: -9.50%|

Next Earnings Date:Aug 13, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong operational performance and growth in customer markets, coupled with significant progress in energy portfolio transitions. However, challenges in thermal fleet availability and customer margin compression posed concerns. Despite these challenges, the company's strategic positioning and cost management efforts provide a positive outlook.

Q2-2025 Updates

Positive Updates

Strong Earnings and Customer Growth

AGL reported strong earnings for the half, with a stable underlying EBITDA. The customer markets business recorded good growth in overall customer services across energy, telecommunications, and Netflix, maintaining a strategic NPS score of +3.

Energy Portfolio Transition and Development

AGL's development pipeline has grown to 7 gigawatts, with new firming options added following acquisitions. The 500-megawatt Liddell Battery is on track for early 2026, and flexible fleet capacity increased to 7.6 gigawatts.

Positive Fleet and Energy Market Performance

AGL's flexible asset fleet captured significant value amid market volatility, achieving a premium above average market prices. Battery investments showed strong performance, reinforcing the strategy for growth in grid-scale batteries.

Cost Management and Cash Flow

Operating costs were maintained flat to FY '24 levels despite inflation, supported by productivity initiatives. The operating free cash flow, excluding bill relief timing, was $291 million with a strong cash conversion rate of 86%.

Negative Updates

Thermal Fleet Performance Challenges

The thermal fleet's availability factor was lower due to planned outages and minor unplanned outages, affecting overall performance.

Decrease in Underlying Profit

Underlying profit after tax was $373 million, 7% lower than the prior half, driven by higher depreciation, amortization, and increased income tax.

Customer Margin Compression

Margin compression across consumer gas and electricity portfolios was noted, driven by decisions not to pass through full cost movements and customer switches to lower-priced products.

Increased Operating Costs

Higher operating costs were incurred due to acquisitions and managing outages, impacting the financial results for the half.

Company Guidance

During the AGL Energy Half Year Results Briefing Conference Call, several key metrics and updates were provided. The underlying profit after tax was reported at $373 million, which is a 7% decrease from the previous half, mainly due to higher depreciation and amortization costs. The company's thermal fleet availability factor was lower this half due to planned outages, but the development pipeline has expanded to 7 gigawatts, with the 500-megawatt Liddell Battery on track for early 2026 operations. AGL's flexible fleet capacity increased to 7.6 gigawatts, with further investment decisions on 1.4 gigawatts of grid-scale battery projects expected within 12-18 months. The company declared an interim ordinary dividend of $0.23 per share, fully franked. Additionally, AGL reported a total injury frequency rate of 2.8 per million hours worked and maintained a strong customer satisfaction score with a strategic NPS of plus 3. The employee engagement score was steady at 72%, and $75 million of the $90 million Customer Support Package has been delivered. The company also highlighted its retail transformation program, which aims to generate pre-tax savings of $70 million to $90 million annually from FY '29.

AGL Energy Financial Statement Overview

Summary

AGL Energy Limited exhibits solid financial health with robust cash flows and reasonable profitability margins. Concerns include declining revenue and a moderate level of leverage, but strong cash flow generation and operational efficiency are positives.

Income Statement

Positive

AGL Energy Limited shows a mixed performance on its income statement. The company has a strong gross profit margin of 15.8% and a net profit margin of 5.2% for 2024, indicating good profitability. However, revenue has been declining at a rate of -4.1% from the previous year, which is a concern. The EBIT margin of 7.3% and EBITDA margin of 15.1% suggest operational efficiency, but the negative revenue growth rate could impact future profitability.

Balance Sheet

Positive

The balance sheet reflects moderate stability with a debt-to-equity ratio of 0.5, indicating a manageable level of leverage. The return on equity is 13.1%, showing decent profitability from equity investments. However, the equity ratio of 34.7% suggests that a significant portion of the company's assets is financed through debt, which could pose risks if liabilities increase.

Cash Flow

Positive

AGL Energy demonstrates strong cash flow performance with a significant free cash flow growth rate of over 386.8%, driven by improved operating cash flows. The operating cash flow to net income ratio of 3.2 and a free cash flow to net income ratio of 2.0 indicate efficient cash conversion and solid cash generation relative to net income.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
14.53B	13.58B	14.16B	13.22B	10.94B	12.16B
	Gross Profit
4.03B	2.15B	1.15B	1.09B	1.49B	2.26B
	EBIT
2.80B	992.00M	691.00M	1.74B	-883.00M	1.79B
	EBITDA
1.87B	2.06B	-700.00M	2.13B	-1.69B	2.33B
	Net Income Common Stockholders
232.00M	711.00M	-1.26B	860.00M	-2.06B	1.01B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
253.00M	971.00M	376.00M	341.00M	370.00M	357.00M
	Total Assets
15.17B	15.66B	15.24B	19.27B	15.45B	14.61B
	Total Debt
2.81B	2.73B	2.88B	2.88B	3.19B	3.11B
	Net Debt
2.56B	1.80B	2.73B	2.75B	3.10B	2.97B
	Total Liabilities
9.90B	10.23B	10.12B	12.75B	9.95B	6.63B
	Stockholders Equity
5.27B	5.43B	5.12B	6.52B	5.50B	7.97B
Cash Flow		Free Cash Flow
767.00M	1.40B	288.00M	591.00M	555.00M	1.40B
	Operating Cash Flow
1.90B	2.24B	912.00M	1.23B	1.25B	2.11B
	Investing Cash Flow
-1.41B	-926.00M	-729.00M	-885.00M	-937.00M	-835.00M
	Financing Cash Flow
-395.00M	-530.00M	-159.00M	-303.00M	-366.00M	-1.25B

AGL Energy Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price10.37

Price Trends

50DMA

10.49

Negative

100DMA

10.68

Negative

200DMA

10.86

Negative

Market Momentum

MACD

-0.06

Negative

RSI

48.70

Neutral

STOCH

71.85

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:AGL, the sentiment is Neutral. The current price of 10.37 is above the 20-day moving average (MA) of 10.36, below the 50-day MA of 10.49, and below the 200-day MA of 10.86, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 48.70 is Neutral, neither overbought nor oversold. The STOCH value of 71.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:AGL.

AGL Energy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CUE	70 Outperform	AU$80.40M	8.52	13.84%	17.39%	-16.65%	-46.22%
LPE	70 Neutral	AU$21.86M	6.56	30.50%	―	15.59%	―
AGL	69 Neutral	$6.98B	30.08	4.36%	5.67%	15.96%	-40.06%
APA	68 Neutral	$10.89B	8.55	-1.44%	6.86%	8.15%	-103.96%
Sector *	64 Neutral	$8.53B	10.34	4.24%	4.37%	4.14%	-13.04%
COI	47 Neutral	AU$173.48M	―	-3.68%	―	―	72.09%
EWC	37 Underperform	$52.34M	―	-84.72%	―	-67.88%	-19190.91%

* Utilities Sector Average

Performance Comparison

AU:AGL

AGL Energy

10.37

0.59

6.03%

AU:APA

APA Group

8.35

0.49

6.19%

AU:COI

Comet Ridge Ltd

0.14

-0.06

-30.00%

AU:CUE

Cue Energy Resources Limited

0.12

0.03

33.33%

AU:EWC

Energy World Corporation Ltd

0.02

<0.01

70.00%

AU:LPE

Locality Planning Energy Holdings Limited

0.12

0.02

20.00%

AGL Energy Corporate Events

AGL Energy Announces Change of Registry Address

Jun 10, 2025

AGL Energy Limited has announced a change in the registry address for its Sydney office of Computershare Investor Services Pty Limited, effective from June 10, 2025. This move is part of AGL’s ongoing efforts to streamline its operations and maintain efficient communication with its stakeholders. The change is not expected to impact the company’s operations significantly, as telephone numbers and postal addresses remain the same.

The most recent analyst rating on (AU:AGL) stock is a Hold with a A$10.85 price target. To see the full list of analyst forecasts on AGL Energy stock, see the AU:AGL Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.