FY22 underlying profit of $225m was in line with expectations. No specific guidance was provided for FY23, although AGL Energy acknowledged it was unlikely earnings would grow significantly.

Morgans lowers expectations for FY23, given the probability of another year of challenges in the wholesale electricity market. The broker had hoped there would be more options in electricity derivatives but it appears this is not the case.

Therefore, FY24 earnings forecasts are also reduced to allow for a longer period of time for pricing increases to flow through. Add maintained. Target is reduced to $8.63 from $9.67.

Sector: Utilities.

Target price is $8.63.Current Price is $7.84. Difference: $0.79 - (brackets indicate current price is over target). If AGL meets the Morgans target it will return approximately 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2022 Acquisdata Pty Ltd., source FN Arena