Why is the AGL share price outperforming today?

What’s going on with the energy producer and retailer’s stock today?

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Key points

  • The AGL share price is displaying a better performance than most of its peers on Tuesday, falling just 0.35% to trade at $8.45 
  • It comes as the ASX 200 dumps 1.77% and the utilities sector slumps 1.59% 
  • While there's been no price-sensitive news from the company, it announced a new sustainability-focused partnership today 

The AGL Energy Limited (ASX: AGL) share price is in the red on Tuesday. Though, it’s outperforming many of its peers.

Right now, S&P/ASX 200 Index (ASX: XJO) is trading 1.77% lower. Meanwhile, the S&P/ASX 200 Utilities Index (ASX: XUJ) is down 1.59%.

And while AGL isn’t technically a part of the energy sector, it’s worth noting that the S&P/ASX 200 Energy Index (ASX: XEJ) has plunged 3.55%.

Meanwhile, the AGL share price is recording a 0.35% drop, trading at $8.45 per share.

So, what’s happening with the energy producer and retailer on Tuesday? Let’s take a look.

What’s going on with AGL today?

There’s been no price-sensitive news from AGL to explain its share price’s performance today.

However, the company has agreed to look into using coal ash from its Bayswater power station to make construction materials.

Additionally, some of the company’s preparations for its planned demerger have hit headlines. As has news that the outage at the Loy Yang power station could leave a nearly $90 million dint in AGL’s profits.

AGL and Nu-Rock Building Products have agreed to work together to recycle coal ash from Bayswater, helping to convert the station’s site into “an ecosystem within a circular economy”.

AGL chief operating officer, Markus Brokhof commented:

This technology is a great example of using various value streams, as we produce energy at Bayswater to power the state, our coal ash waste can be recycled for the better by Nu-Rock into bricks that can be used in local construction projects …

We have a very clear plan to rejuvenate our thermal sites into low carbon industrial energy hubs, and this technology would complement those plans.

On top of AGL’s latest sustainability move, the company is reportedly hiring in the lead up to its planned demerger.

If successful, the demerger will see AGL split into AGL Australia and Accel Energy.

The company is working to fill out customer and generation teams for both businesses as it prepared for shareholders to vote on the demerger in June, reports The Australian.

Finally, RBC Capital Markets reportedly believes the outage at Loy Yang A could dint AGL’s bottom line by $25 million a month. That’s if the company’s forced to buy energy from the spot market.

The broker said costs could culminate in a nearly $90 million hit to profits if the impacted unit isn’t up and running by August, reports The Australian.

AGL share price snapshot

Despite today’s dip, the AGL share price is well and truly in the year to date green.

It has gained 33% since the start of 2022. Though, it’s still 3% lower than it was this time last year.

Motley Fool contributor Brooke Cooper 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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