This is a sensible strategic shift. I think market is spooked by the $20bn capex spend, however hardly any of this will be spent by AGL. Rather super funds with low return expectations will fund by investing in solar plants and wind farms. AGL will just deliver the demand via its customer base (ie enter into off-take agreements). Interim CEO mentioned several times on call that they will be demand driven.
It makes a HUGE amount of sense that AGL leverages their competitive advantages and leave the capital spend to those with a woke return expectation.
Owning solar plants and wind farms (supply side) is just a cost of capital shoot out ... the value is in the customers (demand side).
Management said they'll spend on strategic assets where they can extract higher returns e.g battery firming. Shareholders should be happy for management to spend here.
And stock still in play with Brookfield and Grok still on the register!
It's a long game ... but very happy to be there at these levels. DYOR
AGL Price at posting:
$6.63 Sentiment: Buy Disclosure: Held
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