The AGL Energy Limited (ASX: AGL) share price has been well and truly out of form in 2023.
The energy giantâs shares have lost 15% of their value since the start of the year.
This compares to unfavourably to a modest 0.9% gain by the ASX 200 index over the same period.
Why is the AGL share price under pressure?
The main driver of this weakness has been the release of its half-year results from last month.
AGL reported underlying net profit after tax of $87 million, which was a 55% decline on the prior corresponding period. And on a statutory basis, the company posted a loss after tax of $1.1 billion. This includes $706 million of impairment charges from the companyâs accelerated decarbonisation plans.
This poor first-half performance led to AGL downgrading its FY 2023 underlying net profit after tax guidance to between $200 million to $280 million from between $200 million and $320 million.
Pain may not be over
A recent note out of Morgans reveals that its analysts are wary about AGLâs performance in the second half and are doubting its ability to achieve its guidance.
It notes that the company’s full-year EBITDA is skewed 46% to the first half and 54% to the second half. However, in the three years prior to COVID, it was skewed the opposite way.
In light of this, it has been named among a collection of shares that could disappoint in August when they release their results. Morgans commented:
Consensus industrial estimates suggest a second half earnings skew (49%:51%) which is curious given the economic backdrop and is at odds with the typical preCOVID first half skew (56%:44%). More specifically, 49% of companies are expected to be skewed to 2H, well above the 25% in pre-COVID times.
Morgans currently has a hold rating and $6.89 price target on AGLâs shares.
The post Down 15% in 2023, why AGL shares could continue to disappoint appeared first on The Motley Fool Australia.
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More reading
- Morgans warns that these ASX shares could disappoint in FY23
- The AGL share price sank 10% in February. What’s next?
- Donât be deceived by ASX dividends
- 6 ASX 200 directors buying up their company shares in the past week
- 6 asset-rich ASX 200 shares to buy for their takeover potential: expert
Motley Fool contributor James Mickleboro 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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