Shares in struggling energy giant AGL Energy Limited (ASX: AGL) are back in the money today amid a longer-term uptrend that’s been in situ since November.
AGL shares are now trading more than 7% higher at $6.74 apiece, after rallying as high as $6.84 early in the session. Let’s take a look.
What’s driving the AGL share price today?
Whilst there’s been no price-sensitive information from the company’s end today, the team at Credit Suisse upgraded the firm to outperform in a note to clients, adding another bull to the list of analysts covering AGL.
That means that each of Credit Suisse, JP Morgan, and one other broker are bullish on the direction of the AGL share price in 2022.
Credit Suisse values the company at $8.50 per share, whereas JP Morgan reckons AGL should trade at around $7.55.
Aside from this, the S&P/ASX 200 Energy Index (XEJ) has also nudged past 1.5% today and has climbed around 6% in the past week, indicating strengths in the broad sector.
Energy markets are regaining steam as we roll into the first quarter of fiscal 22, as the price of natural gas and coal remain stationed near multi-year highs.
Natural gas has climbed more than 50% in the last year and is up 10% for the month, whereas coal has soared more than 130% and 23% respectively.
Aside from that, ASX energy shares are positioned on the ‘defensive’ rather than ‘cyclical’, because people will consume energy in all phases of the business cycle.
Hence, with the recent spike in US Treasury yields that is hurting the valuations on cyclical and high-growth stocks, it appears that investors are reshuffling capital back in favour of defensive names like AGL.
AGL shares bounced off a low of $5.10 in mid-November and have skyrocketed from January alongside the broad index just as the S&P/ASX All Technology Index (XTX) has tanked over 6% in the same time.
Hence, the $4 billion company by market cap has now shot past its 3-month highs and is on track to finish the session up today as well.
AGL share price summary
In the past 12 months, the AGL share price has fallen more than 44% much to the anguish of shareholders.
However, with the strengths in recent weeks, it has climbed over 15% in the last month and is up 10% for the past week.
Yet, over the long-term, AGL has lagged its key benchmarks substantially, even with its 75 cents per share trailing dividend.
