AGL Energy Update

AGL Energy have an increased share price target of $17.20 (adding 40 cents) from stock analysts Citi Investment Research. The principal reason for this uplift is the now material increase in the value of AGL Energy's 27.5% equity stake in QGC. At Citi's Infrastructure & Utilities Conference held on Wednesday, Paul Anthony addressed the market’s concerns around AGL Energy's electricity retail coverage. The analyst estimates that AGL is in fact slightly long of generation for FY08. This view is driven mainly by the timing of Torrens Island Power Station acquisition, which should be completed in July. AGL Energy's c.3,300MW of equity generation allows considerable flexibility in the company's hedging decisions. As a result, AGL Energy does not necessarily need to be contracting further than three years out, although the analysts would expect the company to buy hedges and caps from the market if prices were appealing relative to internal SRMC. Despite the company referring to its 32.5% equity stake in LYA as 'non-core', the analysts expect the asset to remain an integral part of AGL's generation portfolio for some years to come. they forward price estimates for LYA remain conservative, FY09 for instance, they are projecting a $36.7/MWh achieved price, 44% below the current forward. The analysts are of the belief, that the considerable increase in the value of AGL Energy's stakes in QGC and AOE (via its Moranbah stake) have not been reflected in the share price. The value uplift in the analysts' sum-of-parts for AGL Energy's stake in QGC is 44cps. This underpins the increase in target price to $17.20.

AGL Energy Limited is listed on the Australian Stock Exchange (ASX) under stock code AGK. You can view their investor website here. AGK was listed on the ASX on 12 October, 2006. Mark Johnson is the Chairman for AGL Energy and Paul Anthony the Managing Director. The Company will operate Australia's largest retail energy and dual fuel customer base and consist of a substantial portfolio of wholesale energy contracts and assets to support its retail customer base. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade AGK. Check your charts and good luck with your share trading!