MENU

Citigroup backs energy player AGL Energy Ltd for earnings growth

A Citigroup broker has forecast earnings growth for integrated energy provider AGL Energy Ltd (ASX: AGL) between FY17 and FY21, but declining retail gross margins by the second half of FY19.

AGL Energy opened today at $21.50 down from yesterday’s close of $21.57 and is $21.22 at the time of writing after 12-months of downward share price movement with a small correction noted after the release of strong half-year results in early February.

The Citi broker notes AGL Energy has now matched Alinta’s headline discount of -28% in Queensland as the company tries to compete on price to protect market share.

The broker forecast earnings growth rates for FY17 to FY21 would rise from 6.5% to 9.4%, but expects retail gross margins to decline by 300 basis points to about 10% by the second half of FY19.

AGL reported a statutory profit rise of 91% to $622 million for the half-year ended December 31, 2017, with underlying profit up 27% to $493 million and dividends up 32% to 54c per share and 80% franking payable on March 26.

The Richest Man Alive Invests in This

The richest man in the world has just launched a $100 million investment fund and investors who don't take note could miss out on a massive opportunity.

And it isn't by sheer luck. He did it by looking to the future and investing in the big ideas of tomorrow.

This could be your chance to get in on the ground floor!

Click here to discover more!

Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!