The share price dropping is mainly because of the low wholesale electricity prices at ~$40/MWh and management is forecasting these prices to continue for the next few years. Hence, the slowly declining share price.
And we all know, the market can't wait for a few years especially in today's hot bull market. Today most investors would gamble on a high flying growth stock and double their money in one month than sit around waiting for AGL and wholesale electricity prices to turnaround.
In 2019, wholesale electricity prices were $100/MWh, AGL was bringing in over $1bn free cash flow. Today at $6bn market cap, I'd be yielding > 15%.
IMO, the question is not IF we will go back to generating $1bn FCF. The question is WHEN that will happen. Wholesale electricity prices will eventually go back up. The patient investor will reap the rewards when that happens.
The share price dropping is mainly because of the low wholesale...
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Last
$9.33 |
Change
0.060(0.65%) |
Mkt cap ! $6.276B | |||
| Open | High | Low | Value | Volume |
| $9.34 | $9.35 | $9.27 | $9.226M | 989.0K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 10951 | $9.33 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $9.34 | 3359 | 3 |
View Market Depth
| Last trade - 16.10pm 03/05/2024 (20 minute delay) ? |
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Last
$9.34 |
Change
0.060 ( 0.62 %) |
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| Open | High | Low | Volume | ||
| $9.32 | $9.35 | $9.28 | 285700 | ||
| Last updated 15.59pm 03/05/2024 ? | |||||
| AGL (ASX) Chart |