LGI Ltd (ASX: LGI) is an ASX utilities stock that has been tipped to grow in the next 12 months.
Its share price has fallen 9% year to date, however it remains up almost 30% in the last 12 months.
For context, the S&P/ASX 200 Utilities Index (ASX: XUJ) is up approximately 11% in that same period.
The company is engaged in the recovery of biogas from landfills. It also engages in the subsequent conversion into renewable electricity and saleable environmental products.
Yesterday, the team at Bell Potter released updated guidance on this ASX utilities stock.
This was ahead of LGI's 1H26 result later this month.
Here's what the broker had to say.
1H26 result preview
Bell Potter notes that Australian Energy Market Operator's (AEMO) Q4 2025 Quarterly Dynamics report shows sharp wholesale electricity price declines across the National Electricity Market (NEM).
Prices were down 55% in Queensland and 48% in NSW year-on-year.
As a result, Bell Potter has cut its 1H26 forecasts for this ASX utilities stock. It has reduced revenue by 5% to $20.0m, EBITDA by 2% to $9.7m and NPAT by 3% to $3.6m.
Bell Potter did note that LGI is partially protected from weaker spot prices.
LGI have partially shielded themselves from the weakening of spot prices with a ~75% hedge book for FY26.
Despite this forecast cut, full-year guidance remains for underlying EBITDA growth of 25–30% ($21.7–22.6m), with Bell Potter forecasting $22.0m.
Earnings are expected to be stronger in the second half due to typically higher electricity prices.
Some good news
In yesterday's report, the broker also pointed out that The Australian Government introduced a new landfill gas method for creating ACCUs in November 2025 to improve scheme integrity.
Under the new rules, baselines will rise by 0.5% each year and are set at 30% for flaring-only projects, 37% for new electricity-generating projects, and 40% for existing electricity-generating projects, with ACCUs only earned above these levels.
LGI is expected to be less affected than competitors. This is because its projects already operate at an average baseline of about 37%.
We downgrade EPS by -3%/-4%/-6% across FY26/27/28 reflecting reviewed commodity price and volume forecasts following new AEMO information and regulatory ACCU changes.
Price target optimism for ASX utilities stock
Based on this guidance, the team at Bell Potter has retained its buy recommendation on LGI shares.
The broker also has a price target of $4.70.
This indicates an upside of approximately 26%.
We anticipate the scheduled pipeline in reaching 80MW+ to be reflected in significant earnings growth for LGI through FY26 and the coming years. The company is adequately funded to execute its medium-term targets with further scope to upgrade existing sites.
Based on the report out of Bell Potter, this ASX utilities stock could be one to target before LGI's 1H26 result later this month.
