October wasn't the prettiest month for the AGL Energy Limited (ASX: AGL) share price. While the energy retailer wasn't the worst performer on the S&P/ASX 200 Index (ASX: XJO) – that honour went to Whitehaven Coal Ltd (ASX: WHC), falling 22.3% – it also didn't do shareholders any favours with a 1.2% decline.
At the start of the month, AGL shares were commanding a $5.79 price tag. Yet, after a month of events and news, the company's valuation finished 1.2% lower.
Shareholders are likely not happy with this wealth diminution. Though, it sure beats the diabolical 1-month performance of October 2020, which witnessed the AGL share price plunge 8%.
Nevertheless, today we recap the month that has been for the embattled energy retailer.
What happened in October?
While there weren't many announcements from AGL directly, it was a busy month for energy-related news more broadly. But before we jump the gun, let's take a look at what the company shared with the market in October.
The first significant event was Macquarie Group Ltd (ASX: MQG) and its controlled bodies ceasing to be a substantial shareholder. This comes as the investment bank continues to plough a significant amount of capital into renewable energy. As my Fool colleague Tristan Harrison covered, Macquarie has deployed A$6.64 in renewable energy for every A$1 invested in 'conventional' energy.
Beyond this, the month was also peppered with industry-specific news that might have skewed AGL investors. For instance, my colleague Brooke Cooper covered an energy expert's predictions of the demise of coal. This may have potentially weighed on the AGL share price.
In short, Energy Security Board chair Dr Kerry Schott revealed an expectation for coal-fired electricity to be removed from the grid by 2040. This cessation would be more than 10 years ahead of the current schedule.
Additionally, Capgemini's 23rd edition of the World Energy Markets Observatory pointed out the utilities sector. To be precise, the report's number 1 priority is, "Utilities transformation roadmaps must be reconsidered in a post-COVID world" for the transition to carbon neutrality.
While AGL is taking on the challenge to an extent, investors might be worried about the costs. In FY21, bottom-line earnings came in at a loss of $2.06 billion. During the period, AGL forked out $357.6 million to gain a 20% stake in Tilt Renewables' Australian operations.
Analysts take on the AGL share price
Contrary to the current trajectory, analysts at Ord Minnett have forecast a brighter future for the AGL share price. According to its assessment, the company looks appealing at its current valuation, so much so that it could make for a potential takeover target.
As such, the broker has assigned AGL with a share price target of $7.55 and a buy rating.
