Morgan Stanley suggests the uncertainty in Australia’s policy environment recently and political developments have caused the shares to decline around -3-4%. Based on the performance of share prices through previous similar political developments, which have involved energy policy debates, the broker believes the impact is now reflected in AGL’s share price.
The broker believes there is an urgency for self-help initiatives, and earnings are likely to peak in FY19 for AGL Energy and decline thereafter. Projected returns are near the bottom of returns for stock coverage and Morgan Stanley envisages downside risk. Underweight rating maintained. Target is $19.44. Industry view is Cautious.
Target price is $19.44.Current Price is $19.15. Difference: $0.29 – (brackets indicate current price is over target). If AGL meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).