Following the release of demerger scheme details, Morgans sees limited downside to AGL Energy's share price if the demerger doesn't proceed. It's thought any potential multiple expansion of AGL Australia hasn't been priced-in by the market as yet.

The broker maintains its Add rating due to a strong wholesale electricity market which should materially lift earnings for the legacy generation assets. The target price is lowered slightly to $9.26 from $9.29.

Sector: Utilities.

Target price is $9.26.Current Price is $8.35. Difference: $0.91 - (brackets indicate current price is over target). If AGL meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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