ASX:AGL
AGL Energy Limited
Investment Summary
The fund managers believe that AGL Energy Limited is in a strong position for growth, particularly after the company's recent FY24 earnings guidance upgrade of approximately 6% above market expectations. They note the challenges in supply leading to volatility in wholesale pricing and higher futures prices, which they see as supportive of earnings growth into FY26. Additionally, there is a common understanding among them that the energy transition may be prolonged, positioning AGL favorably due to its key baseload power assets in Victoria and New South Wales. The fund managers express confidence in AGL's solid near-term cash generation, which is crucial for funding necessary transition-related capital expenditures.
Commentary From The Managers
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.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.