It's been a big week for the AGL Energy Limited (ASX: AGL) share price, but unfortunately, not in a good way.
AGL ended the trading week with the release of its full-year earnings report for FY22. Investors haven't responded kindly through, with the AGL share price closing 3.9% lower on Friday at $7.84 a share.
This latest move means that AGL is now down almost 8% over the past five trading days. But the company has still been a strong performer over 2022 thus far, with a recorded year-to-date gain of 24%.
So as we covered this morning, AGL recorded a 20.8% rise in revenues to $13.22 billion. However, underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 27% to $1.21 billion.
Underlying profit after tax was also down 58% to $225 million. AGL also slashed its final dividend to 10 cents per share. That's down significantly from last year's dividend of 28 cents.
But now we know what AGL's FY22 books look like, could the company be a buy today?
Is the AGL share price in the bargain bin yet?
Well, one ASX broker isn't going that far. According to reporting in The Australian on Friday, Sarah Xie, analyst at Moody's, was not enamoured with AGL's results. Even so, she still said they "nevertheless sit within Moody's expectations".
Xie reckons things could be looking up for the energy company, stating she "expects earnings pressures to ease in FY23-24" as the company's pricing hedges roll off. This means it can receive higher prices for its energy. However, Xie also noted that "AGL's heightened exposure to ESG and policy risks remain a key challenge".
Here's some more of what she said:
The company's generation earnings reduced due to lower realised wholesale energy prices from its hedge positions, generator outages at its increasingly unpredictable aging thermal assets, insufficient insurance coverage for these outages, as well as increased fuel cost for the gas peakers…
The cost competitiveness of AGL's thermal generation and its ability to source fuel at contained cost will continue to remain its strengths – which supports cash flows as the company navigates uncertainties regarding the board and management renewal, and the direction of its strategic review.
So this view paints a potentially positive future for AGL. But it's hardly what AGL investors might call a ringing endorsement, which would certainly have been welcome after Friday's share price moves.
At the last AGL share price, the ASX 200 energy company had a market capitalisation of $3 billion, with a trailing dividend yield of 6.41%.
