AGL +9.73%: Held an investor day and upgraded both FY23 and FY24 earnings guidance materially above consensus and the stock rallied accordingly, although it saw some profit taking into the close. For FY24, they have guided to underlying EBITDA of between $1,875 and $2,175 million; and underlying Profit after tax between $580 and 780 million. A big range but at the midpoint of $680m that’s 16% above the current consensus. On the flip side, they did tweak their dividend guidance down, now targeting a payout of 50-75% of underlying profit, which should still have them yielding ~5.5% (likely to be unfranked until FY25) whilst also being able to take advantage of the energy transition.
- On the new FY24 guidance, we have AGL still trading on 11.5x, and for that reason, we have decided to HOLD our position in the Income Portfolio, which we bought in February at $6.96.
MM intends to hold AGL
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