Macquarie Maintains 'Outperform' Rating on AGL Energy

Sonal Goyal

18 July 2025 12:51 PM AEST

Macquarie Maintains 'Outperform' Rating on AGL Energy

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Highlights

Macquarie rates AGL ‘Outperform’ with a target price of AUD 11.13, indicating a potential upside of 16.30%.

1H FY25 underlying NPAT down 7%, but earnings guidance has been narrowed, indicating improved visibility.

AGL declared a fully franked interim dividend of 23 cents, reinforcing shareholder returns despite transformation costs.

AGL Energy Limited (ASX:AGL) has received a fresh vote of confidence from Macquarie Research, which reaffirmed its ‘Outperform’ rating on the Australian energy utility major. With a revised price target of AUD 11.13, the brokerage implies a 16.30% upside from AGL’s current share price of AUD 9.59 (as of 18 July 2025).

This positive stance comes at a time when AGL is navigating a complex operational and financial environment.

Financial Snapshot

On 12 February 2025, AGL announced its 1H FY25 results, reporting:

Statutory profit after tax of AUD 97 million, impacted by significant items such as a AUD 165 million increase in onerous contract provisions and AUD 45 million in retail transformation costs.
Underlying EBITDA of AUD 1.068 billion, down just 1% year-on-year.
Underlying net profit after tax came in at AUD 373 million, a 7% decrease from 1H FY24.

Withthe dip in earnings, AGL narrowed its FY25 earnings guidance, showing a tightening in expected performance bands. The updated FY25 guidance forecasts:

Underlying EBITDA between AUD 1.935 and 2.135 billion.
Underlying NPAT between AUD 580 and 710 million.

Dividend Stability Reassures Investors

AGL declared an interim fully franked dividend of 23 cents per share, aligning with its dividend policy of targeting a 50–75% payout of annual underlying NPAT. This interim payout, was paid on 27 March 2025.

About the Company

AGL Energy, a proudly Australian company with a rich legacy of innovation, is committed to delivering simple, fair, and accessible essential services to its customers as they transition towards electrification and decarbonisation. As the operator of Australia’s largest electricity generation portfolio within the National Electricity Market, AGL’s diverse assets span coal, gas, wind, hydro, solar, and battery storage technologies. With a longstanding position as one of the country’s leading private investors in renewable energy, AGL continues to play a pivotal role in shaping a low-emissions, affordable, and smarter energy future for Australia.

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