AGL Energy (AGLXY) AI Stock Analysis

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AGL Energy

(Other OTC:AGLXY)

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Rating:67Neutral

Price Target:$7.00▲(10.31% Upside)

Action:reiterated

Date:08/17/26

The score is supported by attractive valuation (low P/E and high dividend yield) and a generally positive earnings-call outlook around liquidity, cash conversion and dividend intent. It is held back by weaker cash flow execution (negative free cash flow in 2025–2026) and technical indicators that are near overbought despite a modestly positive trend.

Positive Factors

Operating performance and cash conversionStrong EBITDA and operating cash conversion indicate that AGL’s integrated generation and retail model is producing resilient underlying earnings, supporting reinvestment, debt servicing and shareholder distributions over the medium term.

Negative Factors

Negative free cash flowPersistent negative free cash flow suggests that capital requirements are absorbing reported profitability. If sustained, this could increase reliance on debt or asset recycling and constrain investment capacity, dividends and balance-sheet flexibility.

AGL Energy (AGLXY) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $4.27B
Dividend Yield: 5.33%
Average Volume (3M): 1,875
Price to Earnings (P/E): 8.1
Beta (1Y): 0.26
Revenue Growth: -1.14%
EPS Growth: ―
Country: US
Employees: 3,735
Sector: Utilities
Sector Strength: 66
Industry: Independent Power Producers

AGL Energy Business Overview & Revenue Model

Company Description

AGL Energy Limited offers energy and a range of related services to a diverse customer base throughout Australia, including residential users, small and large businesses, and wholesale clients. The company's activities are structured into three prima...

How the Company Makes Money

AGL primarily makes money through a combination of energy retailing and electricity generation. On the retail side, it earns revenue by selling electricity and natural gas to end customers under contracted pricing plans; its margins generally reflect...

AGL Energy Earnings Call Summary

Earnings Call Date:Aug 10, 2026(Q4-2026)|% Change Since:12.14%|Next Earnings Date:Feb 09, 2027

Earnings Call SentimentPositive

The call conveyed a largely positive operational and strategic result: EBITDA growth, strong cash generation, improved customer metrics, robust battery and flexible-asset performance, successful monetisation (Tilt) and disciplined capital allocation. Key near-term headwinds include a marginal decline in underlying NPAT due to higher depreciation and financing costs, a material extension and cost increase to the retail transformation program, softer generation volumes in a mild year, and rising gas costs as legacy contracts roll off. Overall, the positives (cash strength, balance sheet, customer and asset performance, clear pipeline and realised divestment gains) outweigh the negatives, though investors should model the deferred retail benefits, depreciation uplift and gas cost dynamics into near-term earnings.

Positive Updates

Solid EBITDA and Cash Generation

Underlying EBITDA of $2.1 billion (up 2% year-on-year) with strong operating cash flow and a 97% cash conversion rate (excluding margin calls, rehabilitation and timing of bill relief). Underlying operating free cash flow was $110 million higher year-on-year.

Negative Updates

Underlying Net Profit Pressure

Underlying NPAT was marginally lower year-on-year, driven by an anticipated increase in depreciation and amortisation and higher finance costs. Depreciation and amortisation expected to increase by roughly $50 million in FY'27.

Company Guidance

AGL’s FY‑27 guidance targets a higher dividend payout ratio of 55–60% of underlying NPAT (expected fully franked), within the company policy of 50–75%, after a FY‑26 full‑year dividend of $0.50/share (final $0.26) and a 53.3% payout; management says FY‑27 underlying EBITDA should reflect stabilizing consumer margins, a full year contribution from the Liddell battery and lower operating costs from its $50m p.a. cost‑out program (of which $30m was delivered in FY‑26), partially offset by higher gas costs as legacy contracts roll off and lower wholesale prices rolling through contracts, and FY‑27 underlying NPAT guidance incorporates ~+$50m of higher depreciation & amortisation and ~–$30m of lower finance costs; FY‑27 capex guidance is roughly $800m growth and ~ $700m sustaining (including ~ $500m on the thermal fleet), the business is largely hedged for FY‑27, cash conversion was 97% in FY‑26 and liquidity remains strong (~$1.6bn), while the retail transformation is extended by up to 12 months with an incremental $100–150m cost (full benefits unchanged: $70–90m p.a. pretax from FY‑30, with $25m already delivered).

AGL Energy Financial Statement Overview

Summary

Earnings improved in 2026 with stronger margins and positive profitability, and leverage looks moderate (debt-to-equity under 1.0 historically). The main constraint is cash flow quality: operating cash flow is inconsistent and free cash flow has been negative in 2025–2026, raising funding/flexibility risk if it continues.

Income Statement

62Positive

Balance Sheet

68Positive

Cash Flow

45Neutral

Financial statement breakdown
Breakdown	TTM	Jun 2026	Jun 2025	Jun 2024	Jun 2023	Jun 2022
Income Statement
Total Revenue	13.55B	13.29B	13.84B	13.12B	14.16B	13.22B
Gross Profit	1.87B	1.84B	2.93B	3.25B	1.15B	1.09B
EBITDA	2.41B	2.36B	1.00B	2.06B	1.50B	2.11B
Net Income	763.62M	739.48M	-98.00M	711.00M	-1.26B	860.00M
Balance Sheet
Total Assets	15.98B	15.98B	16.20B	15.66B	15.24B	19.27B
Cash, Cash Equivalents and Short-Term Investments	710.04M	710.04M	332.00M	971.00M	376.00M	341.00M
Total Debt	4.03B	4.03B	3.31B	2.73B	2.88B	2.88B
Total Liabilities	10.71B	10.71B	11.35B	10.23B	10.12B	12.75B
Stockholders Equity	5.28B	5.28B	4.86B	5.43B	5.12B	6.52B
Cash Flow
Free Cash Flow	-301.00M	-283.66M	-284.00M	1.40B	288.00M	591.00M
Operating Cash Flow	1.18B	1.12B	841.00M	2.24B	912.00M	1.23B
Investing Cash Flow	-797.85M	-743.39M	-1.56B	-926.00M	-729.00M	-885.00M
Financing Cash Flow	-383.24M	-376.59M	99.00M	-530.00M	-159.00M	-303.00M

AGL Energy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

AGLXY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIG	73Outperform	$6.42B	10.22	15.93%	10.41%	12.93%	-24.59%
AGLXY	67Neutral	$4.27B	8.05	15.10%	5.33%	-1.14%	―
Sector *	66Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
ENIC	64Neutral	$5.59B	9.73	10.78%	4.67%	16.18%	742.80%
AES	63Neutral	$10.58B	5.64	37.94%	4.75%	8.22%	88.79%
VST	60Neutral	$46.44B	23.06	41.48%	0.66%	9.45%	-6.51%
NRG	52Neutral	$20.19B	25.28	25.38%	1.94%	12.70%	54.89%

* Utilities Sector Average

Performance Comparison

AGLXY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
AGLXY	Agl Energy	6.35	0.67	11.80%
CIG	Companhia Energetica Minas Gerais	1.83	-0.12	-6.11%
NRG	NRG Energy Inc	96.06	-76.73	-44.41%
AES	AES Corporation	14.83	1.85	14.21%
VST	Vistra Corp.	138.37	-53.56	-27.90%
ENIC	Enel Chile	4.13	0.38	10.07%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Aug 17, 2026

AGL Energy AI Stock Analysis