Fund Manager Summary
The fund managers believe that the outlook for AGL Energy Limited presents a significant opportunity, particularly following the recent upgrade in FY24 earnings guidance, which is approximately 6% above market expectations. In their opinion, the recent challenges in supply have resulted in volatility in wholesale pricing and a higher futures price, which strongly supports earnings growth into FY26. They note a growing realization that the energy transition will take longer than anticipated, positioning AGL favorably with its key baseload power assets in Victoria and New South Wales. Additionally, AGL's solid near-term cash generation is expected to enable the funding of transition-related capital expenditure, further enhancing its growth potential.
Source: Trading View
Commentary From The Managers
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Paradice Investment Management
30 Sept 2025
$8.85
Summary
- Paradice Investment Management sold their investment in AGL Energy (AGL).
- Concerns about the earnings impact during the company's transition phase influenced the decision.
- The transition phase raises uncertainties regarding future profitability.
- Exiting the position aligns with risk management strategies.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Paradice Investment Management
30 Sept 2025
$8.85
- Paradice Investment Management sold their investment in AGL Energy (AGL).
- Concerns about the earnings impact during the company's transition phase influenced the decision.
- The transition phase raises uncertainties regarding future profitability.
- Exiting the position aligns with risk management strategies.
Summary
Vinva Investment Management
30 June 2025
$9.73
- Vinva Investment Management maintains an overweight position in AGL Energy Limited despite a performance detractor of -15bps during the quarter.
- AGL underperformed as Energy Minister Chris Bowen announced potential changes to the Default Market Offer (DMO) mechanism starting FY27.
- The current DMO price rises of approximately 10% are viewed as excessive for some customers under FY26, affecting around 70% of AGL’s customer base.
- AGL is also reviewing the divestment of its 20% stake in Tilt Renewables.
- The overweight position in AGL is primarily driven by value signals.
Summary
L1 Capital
30 June 2024
$10.68
- AGL Energy (Long +30%) shares showed robust performance after the company upgraded FY24 earnings guidance ~6% above market expectations.
- Recent challenges in supply have caused volatility in wholesale pricing and a higher futures price, supporting earnings growth through FY26.
- There is a growing realization that the energy transition will take longer than initially anticipated.
- AGL is well positioned to navigate this change with its key baseload power assets in Victoria and New South Wales.
- The company's strong near-term cash generation will enable funding of transition-related capital expenditure.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With AGL Energy's recent earnings upgrade and its strategic asset positioning, it seems the market is beginning to grasp that the energy transition may be a marathon, not a sprint, potentially paving the way for sustained growth well into FY26."
Last Updated: 30 Sept 2025
Query The Data
Frequently Asked Questions
Who is investing in AGL Energy Limited (ASX:AGL)?
Fund managers including L1 Capital, Vinva Investment Management and Paradice Investment Management have invested in AGL Energy Limited (ASX:AGL).
Why do fund managers invest in AGL Energy Limited?
Fund managers are investing in AGL Energy Limited due to its recent strong performance, highlighted by an earnings guidance upgrade that exceeds market expectations. The company is positioned to benefit from current volatility in wholesale energy prices, supporting earnings growth through FY26. Additionally, AGL's key baseload power assets in Victoria and New South Wales, coupled with robust cash generation, provide a solid foundation for funding necessary capital expenditures during the ongoing energy transition.
What happened to AGL Energy Limited (ASX:AGL)?
Fund managers have expressed concerns about AGL Energy Limited's earnings during its transition phase, leading to a cautious outlook. Paradice Investment Management recently exited their position, citing potential risks associated with the company's strategic changes. This indicates a trend among fund managers to reassess investments in AGL amid uncertainties surrounding its financial performance.