AGL Energy will be acquiring Amaysim’s Click Energy business for $115m. UBS estimates the transaction to be 1-3% earnings accretive and will help the company in scaling up its retail operations to 4.5m customers by FY24.
On the flip side, the broker expects earnings forecast to decline -18% per annum through FY21-23 given its exposure to lower wholesale electricity prices.
UBS analysts note there is a risk Click Energy’s earnings base may decline from customers churn and have not factored synergies from the acquisition at this stage.
UBS maintains a Neutral rating. Target is increased to $15.60 from $15.25.
Sector: Utilities.
Target price is $15.60.Current Price is $14.80. Difference: $0.80 – (brackets indicate current price is over target). If AGL meets the UBS target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
