Macquarie observes retail business profitability is under pressure. The company’s earnings outlook is suffering as LREC pricing is declining quickly and providing downside risk to forecasts.
Market churn has also returned over the last three months to longer run market averages. Macquarie reduces FY20 estimates by -3% and FY21 by -6% as a result. Neutral rating and $20.61 target maintained.
Target price is $20.61.Current Price is $21.94. Difference: ($1.33) – (brackets indicate current price is over target). If AGL meets the Macquarie target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).