RBC Capital Markets analyst Gordon Ramsay anticipates AGL Energy’s first-half earnings will slightly exceed consensus estimates. The underlying EBITDA is projected at $1.038 billion, with a profit of $300 million. AGL Energy is an Australian electricity generator and gas retailer. The company provides energy solutions for residential, commercial, and industrial customers. Ramsay has given AGL an Outperform rating, setting a price target of $11 per share.
The analyst noted that planned coal unit outages and softer National Electricity Market (NEM) electricity prices were balanced by AGL’s Bayswater two-shifting strategy. This approach reduces operational costs and minimises exposure during periods of low electricity prices. The two-shifting strategy appears to have mitigated some negative impacts on AGL’s performance.
Conversely, RBC expects Origin Energy’s results to fall short of consensus, estimating a profit of $557 million. Origin Energy is an integrated energy company focused on gas and oil exploration, power generation, and energy retailing. The anticipated underperformance reflects the impact of downtime at the Eraring generator and subdued NEM electricity prices. These factors were only partially offset by robust gas margins. Ramsay has assigned a Sector Perform rating to Origin, with a price target of $13.50.
Ramsay highlighted that electricity prices in the NEM averaged $68 per megawatt hour during the half, representing a 34 per cent year-over-year decrease. He also noted that subdued volatility limited potential upside for both utilities during the reporting period.
