What happened to the AGL (ASX:AGL) share price in November?

The company’s shares failed to reverse the negative investor sentiment

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The AGL Energy Limited (ASX: AGL) share price continued its downward trend in November, falling to a decade low of $5.10 last month. Investors dumped the energy company’s shares despite no price-sensitive announcements from AGL.

For the month of November, the company’s share price backtracked 5.6%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) also ended November in the red, shedding around 1% over the same time frame.

At market close on Friday, AGL shares managed to claw back some of their losses, finishing up 1.46% to $5.55.

What’s the latest with AGL?

It’s been a relatively quiet couple of months for the company with its last market-sensitive news being its full-year results in August.

However, a catalyst dragging down the AGL share price might be tough conditions for the national electricity market along with unstable electricity prices.

The company previously noted that a sharp decline in wholesale prices for electricity and renewable energy certificates affected its financial performance. AGL regarded the 2021 financial year as one of the most difficult energy markets on record.

In addition, the increased demand to decarbonise its operations has impacted Australia’s largest carbon emitter. Nonetheless, management plans to turn around its fortunes for AGL to become a more agile business towards renewable energy.

At its annual general meeting (AGM) in September, AGL recognised the disappointing result and aimed to change its fortunes around.

As such, management has focused on reducing operating costs by $150 million by the end of FY22. Also, the sale of non-core assets for $400 million by the end of FY22 is expected to provide ample firepower to the company’s balance sheet. The AGL share price climbed amid the news.

More than half of shareholders voted in favour of AGL setting emission targets ahead of its demerger. This is in accordance with the Paris Agreement which sets out a global framework to limit climate change.

The soon-to-close Liddell coal-fired power station could be a sign of greener pastures. AGL plans to transform the site with a hydro and solar energy facility after Liddell’s shutdown in 2023.

The company is aiming to split into two separate businesses by June 2022. They are bulk power generator AGL Australia, and a carbon-neutral energy retailer, Accel Energy.

About the AGL share price

In 2021, the AGL share price has continued to plummet in value, losing more than 50% for investors. When looking at the last 12 months, its shares are down almost 60%.

Based on valuation metrics, AGL presides a market capitalisation of approximately $3.65 billion, with approximately 658.38 million shares outstanding.

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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