AGL Energy (AGK) News

Submitted by Jim Thesiger on 14 May, 2008 - 16:11

AGL Energy (AGK) has a $15.07 share price target from Australian stock analyst Macquarie Research Equities

AGL Energy (AGK) The happy family talks it up - Strategy day

Focus on readiness for the new regime:

Carbon pricing and renewables as well as NSW privatisation are seen as key drivers of AGL growth opportunities over the next five years, particularly renewables where wind seems likely to offer good returns on capital.

Retail strategy based around scale and new IT platform on track:

UBS has long believed that AGL's new IT platform, if it works, will give the company a firm foundation to eventually use scale as an advantage rather than a disadvantage. Now that half the customers are converted the platform rollout seems to be going very well. AGL noted that net customers have risen since Xmas.

Wholesale and upstream - more plusses than minusess:

AGL attempted to demonstrate that its gas business would not see margin squeeze even if wholesale prices rise. The generation strategy including the key Bogong expansion also looked good. The gas portfolio, although seemingly odds and ends is doing well with a 2P, 500 PJ target in the high net back Hunter valley a positive. AGL's interest in QGC is now worth $1200 m or close to $3 per share.

Valuation - SOTP adjusted to $15.07 - Price target $15.07

We have adjusted our SOTP to $15.07 because of the increased market value of QGC and the read through to AGL's Mooranbah reserves. As yet no allowance for the Hunter Valley reserves target. Because the SOTP is under review we set our price target at the valuation.