AGL – 6.01% Was hit today on a downgrade from Barrenjoey to underweight from neutral. The move was big because the note from Dale Koenders was original and delved into information that has not been covered by others. Essentially, he flags an earnings headwind from FY27 as two supply contracts roll off, specifically, the QGC gas supply contract expiring in December 2027 & Wilpinjong coal supply contract which expires in December 2028.
- The analyst believes that it will result in an aggregate $300 million reduction in group earnings (EDITDA) from FY27-FY30, based on a review of public information regarding its gas and coal supply contracts.
On that basis, they reduced their earnings (EPS) forecasts for FY26-FY27 by 8-13%, and FY28+ by around 30%, reducing PT to $11.20.
MM has turned neutral on AGL at $10.48, assessing our positions
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