Morgans assesses electricity markets remain extremely tight and keeps AGL Energy as its key pick among electricity stocks under coverage. A sustained medium-term earnings recovery is expected.
The broker lowers its forecasts for FY23, which results in its target for AGL Energy falling by -3% to $9.67, while the Add rating is retained.
The Bayswater and Loy Yang plants are well supplied with low-cost coal, notes the analyst, and are expected to underpin margin expansion.
Sector: Utilities.
Target price is $9.67.Current Price is $8.27. Difference: $1.40 – (brackets indicate current price is over target). If AGL meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).
