UBS downgrades AGL Energy to Sell from Neutral with the target falling to $12.25 from $15.60.
The downgrade is driven by margin pressure materially reducing the broker’s wholesale electricity price forecast.
The push towards renewables coupled with the fact that about 90% of AGL Energy’s electricity generation comes from coal, the broker believes AGL’s earnings will decline by -12% (compounded annual growth rate) over FY21-24.
Sector: Utilities.
Target price is $12.25.Current Price is $13.51. Difference: ($1.26) – (brackets indicate current price is over target). If AGL meets the UBS target it will return approximately -10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
