The AGL Energy Limited (ASX: AGL) share price has outperformed the S&P/ASX 200 Index (ASX: XJO) in the past year, but could it go higher?
AGL shares have jumped 5% from $6.22 at market close on 25 October 2021 to the current share price of $6.52. For perspective, the benchmark index has fallen nearly 9% in the same time frame.
Let's take a look at the outlook for the AGL share price.
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Is AGL a buy?
AGL is one of Australia's largest energy providers with a history spanning 185 years. One analyst is predicting AGL shares could rise by up to 35%.
Morgans investment advisor Jabin Hallihan is recommending shareholders "buy" AGL shares.
Analysts have an add rating on the AGL share price with a price target of $8.81. This is a 34.7% upside on the current share price.
Hallilan believes AGL's fixed fuel costs "leaves the company in a good position" given electricity prices are high in all states in Australia.
In comments cited by The Bull, he added:
The company is exiting coal-fired generation by 2035, accelerating the closure of the Loy Yang A power station by 10 years. It's also delivering positive near term earnings.
Meanwhile, Credit Suisse analysts upgraded the AGL share price to an outperform rating in early October with a price target of $8.20. The broker is optimistic AGL's free cash flow will remain strong, as my Foolish colleague James reported.
In a release in late September, AGL advised it is planning to exit from coal fired generation by the end of the 2035 financial year. AGL chair Patricia McKenzie said:
AGL is committing to an ambitious but achievable strategy to deliver a responsible and accelerated low carbon future.
We are aiming to reshape our energy portfolio into a cleaner and more flexible one, transitioning away from coal and focusing on new renewable and firming capacity
AGL share price snapshot
AGL shares have risen nearly 7% in the year to date, while they are down 1% in the last month.
In comparison, the S&P/ASX 200 Index (ASX: XJO) has shed nearly 9% in the year to date.
AGL has a market capitalisation of about $4.4 billion based on the current share price.
