Despite all the recent noise, is it business as usual for AGL shares?

The AGL Energy Ltd (ASX: AGL) share price has been shaky the last few months as investors unload their positions en masse.

Shares in the energy giant are now down 19% over the past month of trade and about 25% lower than the $8.58 apiece they were fetching on 10 August.

Spurring the plunge has been a series of unfortunate events for the energy retailer. Most recently, the AGL’s outgoing CEO Graeme Hunt is set to part ways with the company at the end of this month.

If it’s any consolation, AGL will hold its strategy day later this month, where it will reveal the findings of its strategic review.

No strategic changes seen

Despite the purported interest around AGL’s strategy day, analysts at Macquarie aren’t sharing the excitement.

The broker reckons it’s unlikely to see any new major strategic changes as part of the energy giant’s ongoing review.

In previous times, it was AGL’s dividend that was attractive to investors but Macquarie now believes AGL will use its large FY22 profit to fulfil different mandates.

Notably, Macquaries said there’s “a need for debt reduction, funding of provisions and re-investment in batteries and the energy hubs”, according to a note cited by The Australian.

Retaining cash instead of increasing the dividend would “address AGL’s balance sheet debt and provide the capital to co-invest in the development cities,” it added.

What this means for AGL shares, we will have to see, but no change might mean no change to the share price as well.

Also, for what it’s worth, AGL is trading at relatively low multiples right now.

It currently trades on a price-to-earnings ratio (P/E) of 5.2 times, giving investors an earnings yield of more than 19% at its current price.

That sits well below the Global Industry Standard Classification median for the Utilities Sector of 14.4 times. Meanwhile, AGL also generated a 14% return on equity (ROE) last year and trades at a price-to-book (P/B) ratio of 0.7 times.

That means our ROE as investors is 20% with the share trading at that multiple.

Hence, whilst Macquarie sees no strategic change ahead, the question still remains if there’s to be a change in the AGL share price.

The post Despite all the recent noise, is it business as usual for AGL shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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 recommended Macquarie Group Limited. 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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