AGL Energy Ltd

AGL: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$37.90	Vrzns	Zbjpl

Shock CEO Exit Reflects Poorly on AGL but Expected Normalisation of Conditions More Important

Adrian Atkins , Emma Williams

Apr 23, 2021

We lower our fair value estimate for narrow-moat AGL 6% to AUD 15 on revised corporate cost forecasts associated with the proposed structural separation. We factor in higher corporate costs due to potential duplication of resources including head office functions and loss of scale benefits offsetting previously announced cost-saving initiatives. We now expect EBITDA to fall at an average annual rate of 8.4% to fiscal 2025, compared with 7.4% previously.

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