The AGL (ASX:AGL) share price is down 16% in a month. Here’s why

The company’s shares can’t seem to catch a break.

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The AGL Energy Limited (ASX: AGL) share price has fallen from grace, reaching an all-time low of $6.22 yesterday. This is a stark contrast from when its shares were trading around the $27 mark in April 2017.

Ever since COVID-19, the company has been severely impacted by several downgraded earnings estimates.

At Monday’s market close, AGL shares finished the day slightly up 0.47% to $6.44.

What’s dragging AGL shares lower lately?

There are a few catalysts as to why the AGL share price has tumbled lower over the past month.

First and foremost, AGL released its full year results in mid-August, recording significant losses across the board.

The company acknowledged that it’s struggling with the current conditions of the national electricity market as well as unstable electricity prices. This led to a sharp downturn in wholesale prices for electricity and renewable energy certificates.

Adding to the strain, AGL’s soon-to-close Liddell coal-fired power station faced temporary closures this year. An injured worker and the outage of Liddell Unit 2 forced AGL to shut down operations.

The company plans to transform the site with a hydro and solar energy facility following Liddell’s ceased operations in 2023.

AGL has since proposed to split into two separate energy businesses following a catastrophic 12 months.

The first, New AGL, will focus on delivering electricity, gas, internet, and mobile services to Australian households, emerging as a zero-carbon electricity supplier. And the other business, PrimeCo, will be centred on becoming Australia’s largest electricity generator.

AGL previously noted that it is shifting towards more environmentally friendly options.

AGL share price summary

It has been a disastrous 4 years for AGL shareholders, having lost around 75% of their portfolio value. The company’s share price is down almost 60% in the past 12 months alone, with no end in sight.

It’s anyone guess if and when the AGL share price will stage a recovery and recoup its worth.

On valuation grounds, AGL commands market capitalisation of around $4 billion, with 623 million shares on its registry.

Should you invest $1,000 in AGL right now?

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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