The AGL share price has endured a torrid time in 2021. The stock price more than halved as the company prospects were not looking good. Today, AGL shares were upbeat as a broker upgrade increased their attractiveness.
There was no price sensitive announcement made today by AGL Energy. However, AGL shares gained 8.6% today. Credit Suisse upgraded AGL’s rating to ‘outperform’. This means that AGL has yet another bullish analyst.
Earlier, JP Morgan had already said they were bullish on AGL and set a target price of $7.55 a share. Credit Suisse now values AGL shares at $8.5 a share.
According to the company, FY21 was a challenging year for AGL. In fact, the poor performance was due to lower wholesale electricity prices and reduced electricity generation output at the peak period. Moreover, the roll-off of the legacy supply contract in wholesale gas contributed as well to the weak FY21 results.
After a difficult FY21, nonetheless, AGL remains optimistic for FY22. Thus, the wholesale electricity prices are expected to rebound. The company’s key commodities have improved. It is worth noting that AGL operates some of the lowest cost generations in the national electricity market.
AGL shares currently trade at $6.82 a share and as far as JP Morgan and Credit Suisse analysts are concerned, there is value to be unlocked in AGL shares.