Barrenjoey Downgrades AGL Energy to Underweight Amid Earnings Concerns

Barrenjoey has downgraded AGL Energy Limited (ASX: AGL) to an "underweight" rating due to the impact of expiring cheap coal and gas supply contracts. This shift prompted the firm to reduce its earnings-per-share forecasts for AGL in FY26 and FY27 by 8–13% and by around 30% for FY28. Barrenjoey also slashed AGL’s price target by 19% to $11.20, estimating a potential $300 million EBITDA decline from FY27 to FY30—greater than consensus estimates.

AGL’s recent investments in battery and other energy projects aim to bridge the gap, but Barrenjoey cautions they may not fully offset the lost earnings. With plans to invest $8–10 billion over the next decade to stabilize earnings, AGL’s stock fell by 5.8% in early trading, reflecting market concerns about its earnings outlook.

Customer Notice:

Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance.

Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com