Views on MIN, AGL, & IPL
Greetings. Would you inform me your view on the future performance of MIN, AGL, and IPL. Thanks, Malcolm
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Answer
Hi Malcolm,
Three stocks here but we already covered MIN in an earlier question hence we will focus on AGL and IPL.
AGL Energy Ltd (AGL): Last Wednesday AGL announced strong 1H25 performance, with earnings beating expectations and the market initially reacted positively in the morning before the move faded as focus shifted from positive short-term performance to the full-year result and beyond. They are expecting a softer 2H. The stock has since corrected ~13% dragging the utilities lower in its wake. We have held AGL in our Active Income Portfolio since early 2023 and with a forecasted yield ~4.5% this still looks on point, although growth is slowing. Value will get more enticing if we see a deeper correction back towards $10.
Incitec Pivot (IPL): Reported FY results in November but issued a trading update earlier this month including progress on the separation of the Fertilizer business. The key to the IPL turnaround is the Dyno Nobel transformation and growth agenda targeting ~$300m EBIT uplift over 3-4 years and the timing of Fertilizers separation program which is meant to happen this year. Ultimately, these things could be a large positive for the share price in time, it’s just that uncertainties remain around achieving targets and time frames in which they’ll be achieved. The share trading update also saw some revisions lower in earnings forecasts, which has pressured the share price. Distilling all that down, we think it’s all a bit to challenging for IPL at this point in time, and the trend in share price concurs.
- We are not keen on IPL ~$2.75 seeing no reason to fight the trend.
