The AGL Energy Limited (ASX: AGL) share price has been one of the biggest losers on the S&P/ASX 200 Index (ASX: XJO) over the past year. The country's largest electricity provider has provided a number of concerning updates.
At yesterday's market close, AGL shares finished the day trading 0.44% lower at $8.99.
Let's take a look at what's been impacting the AGL share price.
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What are AGL's concerns?
Investor sentiment has been overall weak this year, although AGL shares have lifted 10% during the past 4 weeks of trading.
The company has struggled with the current conditions of the national electricity market as well as unstable electricity prices.
In its half-year results released in February, AGL noted a sharp decline in wholesale prices for electricity and renewable energy certificates weighed down its financial performance. This is in addition to lower gross margins in wholesale gas and costs to support the business' response to COVID-19.
Furthermore, the soon-to-close Liddell coal-fired power station impacted the company's bottom line. AGL plans to transform the site with a hydro and solar energy facility following Liddell's ceased operations in 2023.
The shock exit of its CEO and failed trademark court case against environmental group Greenpeace also hasn't helped AGL's woes.
In response to the challenging 12 months, the company proposed to split into two separate energy businesses. The first, New AGL, will focus on delivering electricity, gas, internet, and mobile services to Australian households, emerging as a zero-carbon electricity supplier. And the other business, PrimeCo, will be centred on becoming Australia's largest electricity generator.
Only time will tell if the AGL share price can return to its previous high as trends shift towards more environmentally friendly options.
What do the brokers say?
Two recent broker updates came in late May and early June, following the company's 2021 Macquarie conference on 4 May.
Swiss investment firm UBS cut its 12-month price target for AGL by 25% to $7.60. JPMorgan followed suit to also lower its rating by 20% to $8.80. This implies a downside from both brokers on the current AGL share price of $8.99.
AGL share price summary
Since COVID-19 hit Australia's economy, AGL shares have taken a dive from $21.00 to losing more than half their value. The company's share price reached a multi-decade low of $7.97 in mid-May before rebounding slightly.
AGL has a market capitalisation of roughly $5.6 billion, with more than 623 million shares on its registry.
