Why has the AGL (ASX:AGL) Energy share price climbed 18% in a week?

The AGL Energy share price has climbed this week

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Key points

  • The AGL share price has soared 18% in a week
  • The ASX 200 energy Index is also outperforming
  • AGL benefited from rising energy commodity prices and broker upgrades

The AGL Energy Ltd (ASX: AGL) share price is rising this week despite no price sensitive news from the company.

Shares in the company were swapping hands at $7.47, up 2.75% today and 18% higher since last Friday. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down nearly 1% in a week.

Let’s take a look at what might be impacting AGL Energy shares?

What’s happening at AGL Energy?

Despite falling nearly 40% in the past year, the AGL Energy price appears to have turned a corner lately and has been surging this past week. There are a few factors that might be at play, including broker upgrades and rising natural gas and coal prices.

The S&P/ASX 200 Energy Index (ASX: XEJ) is also performing well this week, up 4.21% to 8,585.90 points at the time of writing.

Thermal coal prices have been rising after Indonesia banned coal exports. The price of coal has increased by 23.5% since the start of the year and is now trading at US$209.50 per tonne.

Natural gas has also picked up this year, up 15% since the start of the year to be currently trading at US$4.2950 per MMBtu.

The team at Credit Suisse also promoted the energy company’s share outlook to an outperform rating from neutral this week.

Analysts at Credit Suisse gave the AGL share a price target of $8.50 per share. That’s 15% more than the current share price.

Meanwhile, an ASIC report Australian Securities and Investments Commission report released in late December revealed only 1.47% of the company’s shares are being shorted.

As My Foolish colleague Aaron noted, back in November 4.52% of its share was shorted.

AGL’s power generation focus includes thermal coal along with renewable sources such as hydro, wind, landfill gas and solar power.

Share price snapshot

The AGL share price is up 12% in the past 5 days and 25.76% in the past month.

Despite this, the share has performed nearly 49% below the benchmark ASX index in the past year.

The company commands a market capitalisation of about $4.6 billion based on the current share price.

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

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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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