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Is this ASX 200 share a better buy than Fortescue right now?
Brokers are currently sceptical of shares in S&P/ASX 200 Index (ASX: XJO) iron ore favourite Fortescue Metals Group Limited (ASX: FMG). But the iconic index houses another, potentially more promising, iron ore share.

Champion Iron Ltd (ASX: CIA) has been tipped as one to watch by a major fundie despite expectations the price of iron ore could fall.

The ASX 200 company is developing mining operations in Canada and currently trades at a share price of $4.82.

So, why might the far smaller ASX 200 share be a better buy than Fortescue? Let’s take a look.

Could this ASX 200 share be a better buy than Fortescue?

Janus Henderson Group (ASX: JHG) portfolio manager Tim Gerrard is reportedly bullish on metals and mining, and sustainability.

It’s for those reasons he is also hopeful of ASX 200 mining share Champion Iron, Livewire reports. The fundie was quoted as saying the stock offers “plenty of catalysts and deep value”, continuing:

[Champion Iron is] producing iron ore in Canada … That iron ore is low carbon, it has a low carbon footprint. There’s a lot of hydropower in Canada.

That business is [also] being built off the back of a low capital base … and it can be expanded two or three times and so, even though I know [iron ore] prices might come off, it can be expanded.

But that’s not all the fundie likes about the stock.

Gerrard told the masthead the key to his bullishness is the company’s work to increase the grade of its iron ore, which could allow it to be used in steel recycling operations in the US. That could then lower the company’s carbon footprint further.

Of course, Fortescue has plenty of green plans of its own. The company operates its renewable energy leg, Fortescue Future Industries, and recently committed to a massive decarbonisation push at its Pilbara operations.

While the latest move likely saw climate-conscious investors celebrating, it also raised eyebrows as some brokers queried how the company would fund the $9 billion plan.

Many assume the iron ore giant will reduce its dividends as it works to cut its scope one and two emissions from the region by 2030.

Indeed, most brokers are bearish on the future of the Fortescue share price, with Goldman Sachs tipping a 29% downside.

Shares in the ASX 200 giant are currently trading at $16.73, while the broker expects them to fall to $12.10.

Champion Iron share price snapshot

Shares in Champion Iron and Fortescue have performed similarly so far this year.

Both ASX 200 stocks have slumped around 15% year to date.

Looking longer-term, however, the Fortescue share price has outperformed, gaining 13% over the last 12 months. Meanwhile, that of Champion Iron has risen just 2%.

For context, the ASX 200 has fallen 14% since the start of 2022 and 9% since this time last year.

The post Is this ASX 200 share a better buy than Fortescue right now? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Goldman Sachs. 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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29 September 2022
Woolworths shares: Buy, hold, or fold?
The share price of S&P/ASX 200 Index (ASX: XJO) supermarket giant Woolworths Group Ltd (ASX: WOW) hasn’t managed to dodge 2022’s carnage.

The stock has dumped 9% since the start of the year to currently trade at $34.62.

Meanwhile, the ASX 200 has fallen 12% and the company’s home sector, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ), has slipped 7%.

Have recent struggles put Woolworths shares squarely in the buy zone? Well, that depends on who you ask.

Here’s what brokers are expecting from the ASX 200 supermarket operator.

What might the future hold for Woolworths shares?

Various brokers have vastly differing outlooks for Woolworths shares, with one tipping an upside of 28% and another expecting a 9% tumble. Let’s start with the bears.

Credit Suisse believes the supermarket’s stock is expensive compared to its peers right now, while its future growth may come at a high cost, my Fool colleague Tristan reports.

The broker has slapped Woolworths shares with an underperform rating and a $31.37 price target – 9% lower than its current level.

Alto Capital’s Tony Locantro is also wary of the stock, reportedly slapping it with a sell rating. Locantro said, courtesy of The Bull:

While cost pressures have eased, we’re concerned about the impact from broad cost of living increases on its customers moving forward.

Indeed, Woolworths’ CEO Brad Banducci admitted financial year 2023 could remain “volatile and challenging” for the company amid COVID-19 disruptions, supply chain issues, rising costs, and customers’ cost of living pressures.

The company posted around $61 billion of sales and a $1.5 billion after-tax profit for financial year 2022. That’s despite it having battled against supply chain disruptions, product shortages, high absenteeism, and major flood events.

But not all experts are pessimistic on the supermarket giant.

In fact, Goldman Sachs is incredibly bullish, dubbing Woolworths shares a conviction buy and slapping them with a $44.10 price target. That represents a potential 28% upside.

The broker was pleased with the company’s full-year earnings and optimistic for its future.

It said it expects that the company’s digital and omnichannel advantage will continue to drive market share and margin gains.

The post Woolworths shares: Buy, hold, or fold? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Goldman Sachs. 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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29 September 2022
AGL share price dips as $20b price tag flagged for coal exit
The AGL Energy Limited (ASX: AGL) share price is trading lower on Thursday.

In morning trade, the energy company’s shares are down 0.6% to $6.56.

This compares to a stunning gain of 1.9% by the S&P/ASX 200 Index (ASX: XJO).

Why is the AGL share price underperforming?

The AGL share price is underperforming on Thursday after investors gave a lukewarm response to the company’s strategic review update.

That update revealed that AGL is aiming for an accelerated exit from all coal fired generation.

This will see the company look to close the Loy Yang A Power Station up to 10 years earlier than previously announced.

Management expects this and others actions to reduce its greenhouse gas emissions from 40 million tonnes to net zero.

However, this will come at significant cost, which appears to have spooked investors today.

To achieve its goals, AGL advised that it will progressively decarbonise its asset portfolio with new renewable and firming capacity. This will require a total investment of up to $20 billion by 2036. This is expected to be funded from a combination of assets on AGL’s balance sheet, offtakes, and partnerships.

Are AGL’s shares a buy?

One broker that sees a lot of value in the AGL share price at present is Morgans.

Its analysts currently have an add rating and $8.63 price target on the company’s shares. This implies potential upside of 30% over the next 12 months.

However, it is worth noting that the broker has not yet responded to today’s update and will no doubt be busy assessing how these plans impact its earnings estimates and valuation.

So, investors may want to sit tight and keep their powder dry until Morgans has reassessed the company.

The post AGL share price dips as $20b price tag flagged for coal exit appeared first on The Motley Fool Australia.

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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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29 September 2022
Lost faith in ASX growth shares? Here’s why I still rate these 2 as buys right now
I believe that the lower prices we’re seeing on the share market are presenting us with a good opportunity to invest in ASX growth shares.

Businesses that grow at a quick pace over the long term can benefit from a good rate of compounding over time.

Not every single business is going to achieve revenue growth every single year. But, if the long-term trend is upwards then it could be a promising one to consider. Amid all of the concerns about inflation and rising interest rates, investors have punished the valuations of companies, particularly ones that were predicted to grow strongly.

I’m looking at these two ASX growth shares as two of the opportunities on the market right now:

Universal Store Holdings Ltd (ASX: UNI)

Universal Store describes itself as a specialty retailer of youth casual apparel that operates around 80 physical stores across Australia and two online stores. Those stores operate under the brands Universal Store and Perfect Stranger.

It aims to provide a frequently changing and “carefully curated” selection of on-trend apparel products to a target 16-to-35-year-old fashion-focused customer.

The business opened 11 new stores in FY22. Its “full potential” target is for at least 100 Universal Store sites across Australia and New Zealand. In the first half of FY23, five new stores are expected to open along with two store resizes.

In the first half of FY23, it’s cycling against lockdowns and store closures in the prior year. During the first eight weeks of FY23, total sales were up 54.7% and group like-for-like (LFL) sales grew 5.4%.

The ASX growth share also recently announced it’s going to buy Cheap THRILLS Cycles for an enterprise value of $50 million, representing 6.8x FY22’s underlying earnings before interest and tax (EBIT). This business offers “vintage and coastal inspired youth fashion apparel with broad appeal”. If it were part of the Universal Store business in FY22, it would have added 18% to the earnings per share (EPS).

I think the business has plenty of growth avenues, with new stores, more brands, online sales and operating leverage. It’s also paying a dividend, which can boost shareholder returns.

At the time of writing, the Universal Store share price is down 0.6% at $4.97.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is one of the largest retailers of furniture and homewares in Australia. It’s already the largest pure-play retailer in this space. It sells a mixture of products from third parties, as well as private brand products. Items sold by third parties are shipped straight to customers from those suppliers.

I believe that more Aussies are going to buy more things online over time, which should be a natural tailwind for this e-commerce business.

But, I think Temple & Webster is running a good strategy to capture market share of the furniture and homeware sector. As it grows revenue, it’s able to invest more into marketing, efficiencies, technology and so on. It’s working hard on tools such as artificial intelligence and augmented reality so that customers can get recommendations and see products in their living room (or whichever room they are looking at).

I like that the ASX growth share is trying to grow into new areas such as home improvement (painting, tools and so on) as well as the commercial market. This increases its total addressable market.

In my opinion, the business has a good chance of being able to keep growing its number of customers and its revenue per customer, which will be useful for its long-term revenue growth. Returning customers can help reduce its required spending on marketing.

In early trading on Thursday, the Temple & Webster share price is up 5.89% to $5.03.

The post Lost faith in ASX growth shares? Here’s why I still rate these 2 as buys right now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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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29 September 2022
The Fortescue dividend is hitting bank accounts today. Here’s the latest
If you own Fortescue Metals Group Limited (ASX: FMG) shares, you might want to check your bank account today.

The day has come for the ASX 200 iron ore miner to pay out its second-biggest final dividend in the company’s history.

A fully franked dividend of $1.21 per share will be landing in your account if you scooped up Fortescue shares before the ex-dividend date.

At Wednesday’s market close, the mining giant’s shares finished 2.14% lower to $16.46.

Let’s take a look below at the details regarding the Fortescue dividend.

The Fortescue dividend is on its way!

The Fortescue share price has tumbled in recent times following a retreat in iron ore prices.

This also led the company to report mixed numbers across key metrics in its full-year results for 2022.

Revenue fell 22% year-on-year (YoY) to US$17,390 million despite achieving record shipments of 189 million tonnes.

The latter exceeds the top end of the guidance.

On the bottom line, Fortescue booked a net profit after tax (NPAT) of US$6,197 million, which represented a 40% decline.

Subsequently, the board made the decision to reduce its final dividend by 43% when compared to the record $2.11 paid out in H2 FY 2021.

This took the full-year dividend to $2.07 per share, representing a 42% cut on the prior corresponding year.

Based on yesterday’s closing price of $16.46, Fortescue has a trailing dividend yield of 12.58%.

Fortescue share price snapshot

Iron ore prices have suffered setbacks this year due to unfavourable external factors such as China’s property crisis.

This has caused significant headwinds for Fortescue.

The company’s shares are down 14% in 2022 and could go further if iron ore prices continue to fall.

Fortescue is the ASX’s second biggest iron ore producer with a market capitalisation of approximately $50.68 billion.

BHP Group Ltd (ASX: BHP) is in first place and takes the mantle for the most valued ASX company at a whopping $188.57 billion.

The post The Fortescue dividend is hitting bank accounts today. Here’s the latest appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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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29 September 2022
Why the Apple share price slumped today
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Apple (NASDAQ: AAPL) tumbled today after a Bloomberg report said that the company is walking back plans to boost iPhone production.

This news worried Apple shareholders, sending the tech stock down by 1.27% as of market close.

So what

Apple had originally told its suppliers to prepare for increased production as it anticipated higher demand for its latest iPhone 14 models. But some of that demand for Apple’s entry-level iPhone 14 models never materialized, according to sources speaking to Bloomberg.

Now, Apple is expected to cut back on its production by about 6 million phones. That would put the company’s production of its latest models at about 90 million units in the second half of this year, which is about the same number of new iPhones it produced over the same period last year.

The pullback in iPhone production is apparently the result of higher-than-expected demand for the iPhone 14 Pro/Max models and lower-than-expected demand for Apple’s entry-level iPhone 14 models.

Now what

While Apple investors are reacting strongly to this news today, they should also keep in mind that in early August, a separate Bloomberg article said that Apple was asking its suppliers to produce 90 million units of its new models. So while the company was recently anticipating a surge of demand that didn’t happen, it doesn’t change what the company had originally expected a little more than a month ago.

Apple shareholders may be extra cautious about this news as the Federal Reserve continues to hike interest rates at an aggressive pace and investors worry that the Fed’s move could end up tipping the economy into a recession.

But long-term investors should keep in mind that a temporary pullback in iPhone production isn’t a good reason to dump Apple’s stock.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why the Apple share price slumped today appeared first on The Motley Fool Australia.

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Chris Neiger has positions in Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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29 September 2022
The Newcrest dividend is being paid today. Here’s the lowdown
The Newcrest Mining Ltd (ASX: NCM) share price is having a rough week — down 4% so far at yesterday’s closing bell.

In fact, Newcrest shares hit a six-year low on Tuesday — that’s painful.

In happier news though, Newcrest shareholders will be receiving their dividends today.

The gold miner is paying 20 US cents per share in its final dividend for FY22. In Aussie currency, it’s going to be just over 29.16 AU cents. The dividend comes with 100% franking, too. Handy.

When share prices fall, dividend yields rise

Here’s some food for thought.

In FY22, Newcrest paid a total of 39.5 cents per share in dividends. With the share price as low as it is today, that automatically ups the Newcrest dividend yield significantly.

Based on yesterday’s closing price of $16.07, the yield is 2.46%. Throw franking credits on top and the grossed-up yield is 3.52%.

Why is the Newcrest share price tanking?

Odd, isn’t it? As my colleague Tristan points out, inflation is high right now and gold is typically considered a reliable store of value in volatile markets.

It sits in that defensive class of ASX shares, and investors generally think of gold as a good inflation hedge.

The problem is, Newcrest is feeling the impacts of inflation itself. Not to mention Australia’s rock bottom unemployment rate, which is translating into difficulty finding skilled staff.

When the company delivered its FY22 results, it stated:

Continued pressure on capital costs is expected due to competition for labour from infrastructure projects together with the acute inflationary pressures experienced globally across a range of input costs such as energy and steel, which has been factored into the FY23 guidance.

Newcrest uses multiple levers to manage operating and capital cost pressures in the current inflationary environment and continues to evaluate cost estimates as it progresses its feasibility studies.

Other gold miners aren’t doing well either, in terms of their share prices, in 2022. Let’s compare.

Newcrest shares are down 34% in the year to date. Fellow ASX gold mining stocks Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) are also down 54% and 24%, respectively.

What do the experts think?

Elio D’Amato from Spotee Connect isn’t impressed with Newcrest’s guidance for FY23. He told The Bull this week that he rates the business a sell.

D’Amato explained:

The US dollar is expected to remain stronger for longer, so the gold bulls may have to wait for eagerly anticipated inflation trades.

Gold production guidance of between 2,100,000 ounces and 2,400,000 ounces in fiscal year 2023 is weaker than we expected. All in sustaining costs of between US$930 an ounce and $US1,070 an ounce is higher than we anticipated. Other stocks appeal more at this time.

The post The Newcrest dividend is being paid today. Here’s the lowdown appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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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29 September 2022
Premier Investments share price jumps 7% on record FY22 profits and special dividend
The Premier Investments Limited (ASX: PMV) share price is storming higher on Thursday following the release the retailer’s full year results.

At the time of writing, the retailer’s shares are up 7.5% to $22.25.

Premier Investments share price higher on record profits
- Revenue up 3.9% to $1,497.5 million
- Online sales grew 14.3% to $340.1 million
- Earnings before interest and tax (EBIT) up 2.8% to $969.8 million
- Net profit after tax up 4.9% to $285.2 million
- Fully franked final dividend of 54 cents per share
- Special dividend of 25 cents per share
What happened in FY 2022?

For the 12 months ended 30 July, Premier reported a 5.2% increase in global sales to $1,497.5 million. This was despite the company’s stores being closed for 42,675 trading days during the first half.

Premier’s sales growth was driven partly by strong performances from its key Peter Alexander and Smiggle businesses. Peter Alexander sales were up 11.4% to $428.5 million and Smiggle sales rebounded with a 24.6% increase to $261.2 million.

This was supported by strong online sales growth of 14.3% to $340.1 million. Premier’s online sales are now up fivefold since FY 2017 and represent almost 23% of total sales.

Thanks to EBIT margin expansion of 100 basis points to 22.4%, Premier’s EBIT grew 10.1% to $335 million excluding significant and one-off items. Including these items, EBIT rose 2.8% year over year.

Another positive is that management revealed that it has put its strong earnings to use, clearing its debt and leaving it with a cash balance of $471.3 million.

In light of this strong performance, the Premier Board has elected to pay a fully franked final dividend of 54 cents per share and a fully franked special dividend of 25 cents per share. This took its full year dividend to $1.25 per share, which is up 56.3% year over year.

But the returns won’t stop there. The company has also announced an on-market share buyback of up to $50 million.

Management commentary

Premier’s Chairman, Mr Solomon Lew, said:

Our team has delivered an impressive full year result for our shareholders, especially in the context of significant operational challenges that included Government mandated lockdowns, global supply chain complexities and omicron disruption. Premier Retail EBIT is up 10.1% on the prior year and is more than double pre-pandemic levels. This is testament to the seamless leadership transition to Richard Murray, the unrelenting focus on execution by our management team, and the commitment of our people.

Outlook

As you might have guessed from the Premier Investments share price performance today, the company’s outlook commentary was also very positive.

It advised that FY 2023 has opened strongly with total global sales for the first 7 weeks up 46.7% on the prior corresponding period. They are also up 21.5% on pre-COVID FY 2020 sales.

Management commented:

The strong start to 1H23 and clean inventory position has given the Group confidence that it is well positioned to drive sales through the critical Black Friday, Cyber Monday, Christmas, Boxing Day Sales and ‘Back to School’ trading periods ahead.

The post Premier Investments share price jumps 7% on record FY22 profits and special dividend appeared first on The Motley Fool Australia.

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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 recommended Premier Investments 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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29 September 2022
Here’s why the Global Lithium share price is rocketing 12% higher
The Global Lithium Resources Ltd (ASX: GL1) share price is flying high on Thursday.

In morning trade, the lithium developer’s shares are up 12% to $2.40.

Why is the Global Lithium share price surging higher?

Investors have been bidding the Global Lithium share price higher today following the release of a promising announcement.

According to the release, the company has signed a memorandum of understanding (MOU) with leading Korean battery manufacturer SK On Co (SKO).

SKO is a supplier of batteries to global automakers, including Ford Motor Company, Hyundai Motor Company and Volkswagen. It had an order backlog of 1,600GWh at the end of 2021.

This MOU will see the two parties explore a range of future business opportunities, including the potential development of downstream integrated battery grade lithium assets for an initial two-year period.

In addition, the MOU will see SKO look at: supporting future Global Lithium capital raisings, potential investments, and offtake opportunities at the Marble Bar Lithium and/or the Manna Lithium projects.

Global Lithium’s managing director, Ron Mitchell, commented:

I am extremely excited that Global Lithium has signed a MOU with Korea’s SK On, a leading manufacturer of lithium-ion batteries for the automotive industry on a global scale. The scope of this partnership has the potential to strengthen and diversify the future of Global Lithium’s projects in Western Australia both in the near term and in the years ahead.

Evaluating downstream processing partnerships is a significant part of GL1’s step-change growth strategy and the company will continue to build on a range of advanced discussions around the globe. “The lithium and EV markets have experienced significant growth over the past two years and this expansion is only set to accelerate as demand for lithium-ion batteries increases. A partnership such as this will help position Global Lithium to be a key supplier of lithium to aid the continued sustainable development of the industry.

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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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29 September 2022
AGL share price on watch following major strategic and earnings update
Energy giant AGL Energy Limited (ASX: AGL) will close its Loy Yang A Power Station by the end of FY2035 – up to 10 years earlier than previously announced.

In a statement today, AGL says that it intends to accelerate its transition to an “integrated low carbon energy leader”.

The AGL share price is on heavy watch this morning following the announcement, and pre-market trading activity is already ramping up according to Refinitiv Eikon data.

AGL to exit coal by FY35

After the release of its strategic review, the energy company says that its annual scope 1 and 2 greenhouse emissions are estimated to reduce from 40 million tonnes to “net zero” with the targeted closure.

The company will also gradually decarbonise its asset portfolio by substituting new renewable energy capacity.

It has intentions of supplying its customer demand with “up to 12GW of new generation and firming capacity, requiring a total investment of up to $20 billion, in place before 2036”.

There doesn’t seem to be any expected changes to this year’s forecasted numbers for AGL.

It provided guidance of underlying EBITDA of between $1.25 billion and $1.45 billion, coupled with underlying net profit after tax (NPAT) between $200 million–$320 million.

AGL Chair, Patricia McKenzie, said the decision represents “a new direction for AGL”.

Our decarbonisation and energy investment strategy sets a clear pathway for the company’s future and its leading role in Australia’s energy transition. We have listened to our stakeholders – in particular, our shareholders, as well as government and energy regulatory authorities. Their views were an important consideration as we reviewed the company’s strategic direction after withdrawing the demerger proposal.

Today’s announcement recognises the increasing ESG pressure from investors and consumers that has been affecting our business and we expect to be able access a wider pool of capital and attract new investors, which will ultimately result in a lower cost of capital and a more sustainable business.

AGL also published its inaugural climate transaction action plan along with its strategic review. Shareholders can vote on this at AGL’s annual general meeting held on November 15 2022.

There is also a $700 million non-cash impairment charge that AGL will recognise against the carrying value of the tangible assets at Loy Yang A.

AGL finished with the following:

Overall, AGL believes FY23 earnings will remain resilient amidst the current challenging energy industry and market conditions and is well positioned from FY24 to benefit from sustained higher wholesale electricity pricing as historical hedge positions progressively roll-off.

Investors eagerly await the fallout this morning.

The post AGL share price on watch following major strategic and earnings update 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 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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29 September 2022