Could AGL shares really offer 9% upside and rising dividends in FY23?

Owners of AGL Energy Limited (ASX: AGL) shares could be in for a good 12 months with the S&P/ASX 200 Index (ASX: XJO) giant tipped to grow in its value and offerings.

Indeed, broker Morgans has high hopes for the company despite it posting apparently disappointing full-year earnings last week.

The AGL share price is currently trading at $7.98, flat with its previous close. For context, the ASX 200 is lifting 0.8% at the time of writing.

So, what might be in store for those invested in the company’s stock in the financial year 2023 (FY23)?

Let’s take a look.

AGL share price and dividends tipped to grow

AGL shares could be gearing up to grow in FY23, alongside the company’s earnings and dividends.

While the market doesn’t have any FY23 guidance from the ASX 200 energy producer and retailer, the company has noted it expects its earnings to be resilient this fiscal year amid challenging industry and market conditions.

It’s set to release more detailed guidance alongside the initial outcome of a review of its strategic direction next month.

While Morgans originally held higher expectations for the company in FY23, it’s still holding out hope for a win.

Analyst Max Vickerson conceded the broker is still bullish on the stock, slapping an add rating on valuation upside, despite commenting:

We significantly lower our expectations for FY23 underlying profit (-37%) given the likelihood of another year of wholesale electricity performance. We had hoped for a higher degree of optionality in its electricity derivatives and faster roll over of older hedging and customer pricing. Given the language used to couch the outlook we suspect this is not the case.

Additionally, as my Fool colleague James reports, Morgans has an $8.73 price target on AGL shares, suggesting a potential 9.4% upside.

It’s also tipping the company to pay out 30 cents of fully franked dividends in FY23. That represents a potential 15% increase from its full-year payout of 26 cents in FY22.

The post Could AGL shares really offer 9% upside and rising dividends in FY23? appeared first on The Motley Fool Australia.

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More reading

• Broker tips AGL share price to leap higher
• Is the AGL share price in the buy zone following the company’s latest results?
• Why AGL, Fisher & Paykel, Inghams, and TPG shares are sinking today
• Everything you need to know about the latest AGL dividend
• AGL share price dips after 58% profit slash

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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