The AGL Energy Limited (ASX: AGL) share price has been well and truly out of form in 2023.

The energy giant's shares have lost 15% of their value since the start of the year.

This compares to unfavourably to a modest 0.9% gain by the ASX 200 index over the same period.

Why is the AGL share price under pressure?

The main driver of this weakness has been the release of its half-year results from last month.

AGL reported underlying net profit after tax of $87 million, which was a 55% decline on the prior corresponding period. And on a statutory basis, the company posted a loss after tax of $1.1 billion. This includes $706 million of impairment charges from the company's accelerated decarbonisation plans.

This poor first-half performance led to AGL downgrading its FY 2023 underlying net profit after tax guidance to between $200 million to $280 million from between $200 million and $320 million.

Pain may not be over

A recent note out of Morgans reveals that its analysts are wary about AGL's performance in the second half and are doubting its ability to achieve its guidance.

It notes that the company's full-year EBITDA is skewed 46% to the first half and 54% to the second half. However, in the three years prior to COVID, it was skewed the opposite way.

In light of this, it has been named among a collection of shares that could disappoint in August when they release their results. Morgans commented:

Consensus industrial estimates suggest a second half earnings skew (49%:51%) which is curious given the economic backdrop and is at odds with the typical preCOVID first half skew (56%:44%). More specifically, 49% of companies are expected to be skewed to 2H, well above the 25% in pre-COVID times.

Morgans currently has a hold rating and $6.89 price target on AGL's shares.

The post Down 15% in 2023, why AGL shares could continue to disappoint appeared first on The Motley Fool Australia.

With earnings season now behind, it's time to focus on the second half of FY 2023.

And while the next few months are likely to be very successful for many companies, this may not be the case for all.

According to a note out of Morgans, its analysts believe that some ASX shares are expecting too much from the half. So much so, it suspects that they could fall short of guidance and is warning investors to be careful.

Which ASX shares could disappoint in the second half?

Morgans has warned that there are six ASX shares in particular that could be destined to disappoint in FY 2023.

These are energy company AGL Energy Limited (ASX: AGL), packaging giant Amcor (ASX: AMC), health and safety products company Ansell Limited (ASX: ANN), baby products retailer Baby Bunting Group Ltd (ASX: BBN), property listings company Domain Holdings Australia Ltd (ASX: DHG), and telco Superloop Ltd (ASX: SLC).

The broker highlights that with their guidance for the full year maintained after a soft first half, they will need a significant improvement in their performance in the second half. This is something that is far from guaranteed in the current environment. It commented:

Notable companies (DHG, AGL, AMC, BBN, ANN, SLC) missed forecasts in February. Still, they maintained their full-year guidance, setting the scene for potential earnings disappointment if operating conditions don't recover as planned.

Consensus industrial estimates suggest a second half earnings skew (49%:51%) which is curious given the economic backdrop and is at odds with the typical pre-COVID first half skew (56%:44%). More specifically, 49% of companies are expected to be skewed to 2H, well above the 25% in pre-COVID times. So if post-reporting earnings trends hold, small caps could be again vulnerable at the upcoming May 'confession' season.

The post Morgans warns that these ASX shares could disappoint in FY23 appeared first on The Motley Fool Australia.

The AGL Energy Limited (ASX: AGL) share price was a poor performer in February.

Over the period, the energy company's shares sank almost 10%.

What happened to the AGL share price?

Investors were quick to hit the sell button last month after AGL released its half-year results.

For the six months ended 31 December, AGL reported underlying net profit after tax of $87 million, which was a 55% decline on the prior corresponding period.

On a statutory basis, things were even worse. AGL reported a statutory loss after tax of $1.1 billion. This figure includes $706 million of impairment charges from the company's accelerated decarbonisation plans.

This poor half unsurprisingly led to AGL slashing its dividend by half to just 8 cents per share.

What's next?

One leading broker isn't confident that the AGL share price will rebound in March.

According to a note out of Morgans, its analysts believe investors should wait for a better entry point. In response to its results, the broker said:

Underlying net profit was down 55% on pcp, 60% on our forecast and 45% on Visible Alpha consensus. The key driver was a net $123m impact on the wholesale trading business from the tight winter conditions earlier in the half. This also drove a big miss on DPS with an interim dividend of only 8cps.

We anticipate increasing dividends as earnings begin to recover in the next 12 months however we think the market will want to see clear evidence of this before it regains confidence in the company and the sector.

Morgans has a hold rating and $6.89 price target on its shares. This compares to the latest AGL share price of $6.85.

The post The AGL share price sank 10% in February. What's next? appeared first on The Motley Fool Australia.

At face value, finding the best ASX dividend shares seems easy. You just do some research, find the companies with the highest dividend yields, and start making passive income. Easy, right?

Well, good dividend investing isn't that simple. And in fact, following this 'chasing yields' path is probably a bad idea. Actually, it's a horrendous idea – and one that will probably result in mediocre dividend income, while perhaps giving you some nice capital losses.

See, the dividend yields that we normally see quoted for ASX shares are a reflection of the dividends a company has paid out in the past, not what it will pay out in the future. Take what used to be a popular dividend share, AGL Energy Limited (ASX: AGL).

What does an ASX dividend trap look like?

In 2022, AGL paid out two dividends, one worth 16 cents per share, and one worth 10 cents per share. Using the AGL share price of $8.07 that the company ended 2022 at, those two dividends would have given AGL a dividend yield of 3.22%. That's because 26 cents is 3.22% of $8.07.

Today, the AGL share price is going for $6.89 at the time of writing. That should in theory increase AGL's dividend yield because 26 cents is 3.22% of $8.07, but 3.77% of $6.89. If AGL paid out the same 16 cents per share interim dividend in 2023 as it did in 2022, this would be true.

The problem is that last month, AGL announced its interim dividend would come in at 50% of 2022's levels – yep, just 8 cents per share.

As such, AGL's dividend yield is now 2.61%. So any investor who bought AGL shares a month or two ago expecting a dividend yield of 3.22% or 3.77% has now been caught in a classic dividend trap.

They've lost the yield they thought might be coming their way. And, they've had to endure AGL shares' near-15% drop in value over 2023 thus far.

Everyone in the share market loves a good dividend. So when you see a company offering a dividend yield of 8, 9 or even 10%, it should tell you that investors are staying away for a reason.

Let's take a high-yield example now.

WAM Capital Ltd (ASX: WAM) is a listed investment company on the ASX. It paid out two dividends last year, both worth 7.75 cents per share each. That's an annual total of 15.5 cents per share, giving WAM Capital a whopping dividend yield of 9.2% right now.

So why isn't everyone flocking to WAM Capital shares for that kind of return and thus increasing WAM Capital's share price and reducing its yield down to a more normal level?

Well, investors are being put off by something.

High yield doesn't mean high return

It might be this company's performance track record. Even though this listed investment company (LIC) is yielding a massive figure right now, shareholders have only enjoyed a return of 3.7%, an average over the past three years (as of 31 January)

That means that capital losses have more than offset this high dividend yield. And that's without accounting for WAM Capital's 1% per annum management fee either.

Investors would have been far better off investing in an index fund than this company over the past three or five years. What's more, as of 31 January, this company only had 14.7 cents per share in its profit reserve. Yet last year it paid out 15.5 cents per share in dividends.

So no wonder its dividend yield is so high – the market clearly has doubts over this company's future performance potential.

Compare that to an ASX dividend share like Washington H. Soul Pattinson and Co Ltd (ASX: SOL). On the surface, Soul Patts' current dividend yield of 2.8% doesn't look that impressive. But this figure hides much.

It hides how Soul Patts has increased its dividend every single year since 2000, averaging an 8.5% increase per annum. It also hides that Soul Patts shareholders have enjoyed a total return of 12.5% per annum over the 20 years to December 2022.

Sometimes, a small dividend yield can be worth more than a big one. So don't be deceived by the largest dividend yields on the ASX. Some, if not most, of them are too good to be true.

The post Don't be deceived by ASX dividends appeared first on The Motley Fool Australia.

The February earnings season saw plenty of ups and downs, as well as some insider buying among these S&P/ASX 200 Index (ASX: XJO) shares.

They've each seen directors trading in their company's stocks over the last week.

So, which ASX 200 directors were buying, and how much were they snapping up? Let's take a look.

6 ASX 200 directors buying their company shares

Insider buying is often taken as a sign those working behind the scenes at an ASX 200 company are bullish on its share price's future.

Thus, a barrage of director trades in Dexus Property Group (ASX: DXS) stock might have pricked the ears of market watchers. Particularly the $216,794 trade made by director Paula Dwyer, who snapped up 25,000 shares last Wednesday.

And Dwyer's wasn't the only insider to buy. Directors Elana Rubin and Rhoda Phillippo forked out $50,052 and $21,357 respectively for parcels of 5,813 shares and 2,500 shares over the course of the week.

AGL Energy Limited (ASX: AGL) has also seen recent insider buying, with director John Pollaers buying 10,000 shares for around $6.92 apiece.

Over at ASX 200 financials giant AMP Ltd (ASX: AMP), director Michael Sammells was on a share-buying spree. He snapped up 50,000 stocks in the company for around $1.09 apiece – sneaking in before it traded ex-dividend.

Meanwhile, Ansell Limited (ASX: ANN) director Debra Goodin bought 486 shares in the personal protective equipment manufacturer for a total of $12,959.34.

Director of hauling company Aurizon Holdings Limited (ASX: AZJ), Lyell Strambi, also got in on the insider buying action over the last week. He bought 5,952 shares for $3.36 each – a total of approximately $20,000.

And finally, Bendigo and Adelaide Bank Ltd (ASX: BEN) director David Foster bought 1,021 shares in the regional bank for $9.79 apiece – forking out $9,996 for the additional parcel.

The post 6 ASX 200 directors buying up their company shares in the past week appeared first on The Motley Fool Australia.

Earlier this week, The Motley Fool reported Wilsons equities strategist Rob Crookston's seven ASX growth stocks to buy that could become takeover targets.

The idea behind that, according to the Wilsons team, is that acquisition bids are almost always favourable for the existing shareholders.

"Normally, companies are acquired at a significant premium to their latest share price," said Crookston in a memo to clients.

"Identifying companies that will make suitable takeover targets can make for very lucrative investments."

And the great thing for investors is that an actual transaction doesn't even have to materialise for their ASX shares to explode out of the gates.

"Any hint of a possible acquisition can trigger positive momentum even before a bid is announced."

'Infrastructure-like' ASX shares with free cash flow

One way to identify tempting takeover targets is to find companies that are asset-rich that have reliable incomes.

"We screened for infrastructure or 'infrastructure-like' stocks with low market betas, free cash flow yields (FY25) above 4% and companies that haven't seen a material re-rate over the last year."

Using these criteria, Crookston's team came up with six S&P/ASX 200 Index (ASX: XJO) shares that one could buy in anticipation of a takeover bid:

• AGL Energy Limited (ASX: AGL)
• Aurizon Holdings Ltd (ASX: AZJ)
• Ramsay Health Care Ltd (ASX: RHC)
• APA Group (ASX: APA)
• Cleanaway Waste Management Ltd (ASX: CWY)
• Lottery Corporation Ltd (ASX: TLC)

Crookston noted that Cleanaway and Lottery Corp both already feature in Wilsons' "focus portfolio".

"These look attractive acquisition targets due to their stable cash flows, relatively low debt balances and strong market positioning in their respective markets."

The Lottery Corporation also operates as a monopoly in every state except for Western Australia.

"Looks well priced versus other infrastructure-like assets."

Energy provider AGL was already the subject of a failed takeover attempt last year, as was Ramsay Health.

According to Crookston, the story might not be over for Ramsay.

"Cost out and real estate asset sales could be [an] opportunity for the right buyer. Earnings recovery after the pandemic could also be alluring."

Private ownership might actually help freight rail provider Aurizon operate better, read the Wilsons memo.

"Infrastructure asset, monopoly, relatively steady (high) cash flows. Might benefit from being taken private from an ESG perspective."

The post 6 asset-rich ASX 200 shares to buy for their takeover potential: expert appeared first on The Motley Fool Australia.

To start with, most ASX 200 shares are having a rough time today. At present, the S&P/ASX 200 Index (ASX: XJO) is down by 0.43% at around 7,300 points. But the AGL Energy Limited (ASX: AGL) share price is seemingly having a worse day than most.

AGL shares closed at $6.95 yesterday. But today, the ASX 200 energy generator and retailer opened at $6.93 a share and has fallen down to $6.88. That's a drop of just over 1% – more than double the falls of the broader market.

But it's not as bad as it looks. AGL shares are falling today for one of the best reasons to have an ASX 200 share fall in value – the company has just traded ex-dividend.

AGL share price falls as investors book in dividend

Earlier this month, AGL announced its latest earnings to the market, covering the first half of FY2023. As we covered at the time, it was a fairly brutal report for shareholders to read.

AGL reported that its underlying net profit after tax (NPAT) fell by a horrendous 55% from the previous year to $87 million for the half. And AGL revealed that it would be bringing home a statutory loss after tax of $1.1 billion.

The company's dividends did not get through unscathed either. This year's interim dividend comes in at 8 cents per share, unfranked. That's a 50% cut from last year's 16 cents per share dividend.

So today, AGL shares have traded ex-dividend for said shareholder payment. This means that any new investors in AGL from today are not eligible to receive this latest dividend.

As such, the value of this payment has now left the AGL share price, which is probably why we are seeing the shares lose a big chunk of value on the share market today.

This latest dividend from AGL brings its total payouts for the past 12 months to an unfranked 18 cents per share. That gives the AGL share price a dividend yield of 2.62% right now.

The post Here's why the AGL share price is dipping on Wednesday appeared first on The Motley Fool Australia.

If you'd like to receive the AGL Energy Limited (ASX: AGL) dividend, you don't have a heck of a lot of time.

The S&P/ASX 200 Index (ASX: XJO) energy provider trades ex-dividend tomorrow, Wednesday 22 February.

Here's what investors who own AGL shares can expect.

AGL trades ex-dividend tomorrow

AGL announced its half-year results on 9 February.

Reflecting the difficult period in energy markets, the company reported a 55% drop in underlying net profit after tax (NPAT).

As you'd expect, that also resulted in a big reduction in the AGL interim dividend.

The 8 cents per share unfranked dividend is in fact half of the 16 cents paid out in the first half of the 2022 financial year.

This is consistent with AGL's policy to target a full-year payout ratio of 75% of underlying profit after tax.

At the current share price of $7.01, the interim yield alone comes out to 1.14%. With the 2022 final dividend included, AGL pays a current trailing yield of 2.6%.

If you own shares before the stock trades ex-dividend tomorrow, you can expect the dividend to be paid on 24 March.

AGL's dividend reinvestment plan (DRP) is available as an alternative to receiving cash payments. If you do wish to participate in the DRP, you'll need to do so by 24 February.

How have AGL shares been performing?

Atop its dividends, AGL shares have the potential to deliver share price gains.

However, as you can see in the chart below, the disappointing half-year results have seen a sharp retrace, leaving the AGL share price down 13% in 2023.

With the energy company forecasting higher earnings in the second half of FY23 that might yet turn around.

The post Hoping to bag the next AGL dividend? You'd better be quick appeared first on The Motley Fool Australia.

It's that time of the year folks. The February earnings season is in full swing with S&P/ASX 200 Index (ASX: XJO) shares declaring dividends left, right, and centre, and there are several names set to trade ex-dividend this week.

Once the ex-dividend milestone passes, new investors in the companies will have missed out on their upcoming offerings. It also means the stocks will likely be trading in the red at one point in the week.

Let's take a look at some of the high-profile market giants gearing up to trade ex-dividend this week.

ASX 200 shares trading ex-dividend this week

Among the first to trade ex-dividend will be ASX 200 giant Wesfarmers Ltd (ASX: WES). And I've got bad news for anyone wishing to secure its upcoming dividend but isn't yet invested in the stock.

The retail-focused conglomerate trades ex-dividend this morning. It boosted its interim dividend 10% last week, declaring an 88 cent per share fully franked offering as part of its strong first-half earnings.

Glove and personal protective equipment manufacturer Ansell Limited (ASX: ANN) will also trade ex-dividend today. It declared a 20.1 US cent interim dividend last week – marking a 17% year-on-year drop.

Following in its footsteps on Tuesday will be ASX 200 shares Endeavour Group Ltd (ASX: EDV) and Computershare Limited (ASX: CPU).

The former boosted its interim dividend last week, declaring a fully franked 14.3 cent per share payout – a 14% improvement. The latter beat that. It offered a 30 cent per share unfranked interim dividend – a 25% increase on that of last year.

On Wednesday, shares in ASX 200 goliath Commonwealth Bank of Australia (ASX: CBA) will likely drop as the bank trades ex-dividend. It lifted its dividend by 20% to $2.10 per share last week. Though, that wasn't enough to stop the market bidding the bank's stock 5.7% lower.

AGL Energy Limited (ASX: AGL) will also trade ex-dividend on Wednesday after disappointing many with its half-year results. Its profits for the period tumbled 55% while its interim payout was halved to 8 cents per share.

ASX 200 electronics retailer JB Hi-Fi Limited (ASX: JBH) will pass the milestone on Thursday. JB Hi-Fi posted strong first-half earnings last week. It upped its interim dividend by nearly 21% to $1.97 per share, fully franked.

Finally, Friday will probably be a rough one for the share price of GUD Holdings Limited (ASX: GUD). Would-be shareholders will then miss out on GUD's 17 cent per share interim payout, declared last Wednesday.

The post 8 ASX 200 shares trading ex-dividend this week appeared first on The Motley Fool Australia.

Since the start of February, the energy giant's shares have fallen 5.5%.

All of this decline has come since the release of AGL's half year results, which fell well short of expectations.

For the six months ended 31 December, AGL reported an underlying net profit after tax of $87 million, which was a massive 55% decline on the prior corresponding period. This led to AGL slashing its dividend by half to 8 cents per share.

Well, with the bad news out of the way, investors may now be looking at AGL shares and wondering if an investment opportunity has been created by this weakness.

What if you were to invest $1,000 into its shares now? Would you get a good return on your investment in 2023?

Would you get a good return from AGL shares?

While opinion is divided on where AGL shares are heading, one leading broker sees plenty of upside ahead for investors. Particularly given that a return to form is expected in FY 2024.

According to a note out of Credit Suisse, its analysts responded to AGL's half year results by retaining their outperform rating with a trimmed price target of $8.70.

Based on the current AGL share price of $7.22, this implies a potential return of 20.5% for investors over the next 12 months.

This means that a $1,000 investment would turn into $1,205 if Credit Suisse is on the money with its recommendation.

In addition, the market is expecting a 26 cents per share dividend in FY 2023, which equates to a 3.6% dividend yield. This would add an extra $36 to your return, bringing your total potential return to a solid $1,241.

The post If I invest $1,000 in AGL shares now, what could my return be this year? appeared first on The Motley Fool Australia.

The AGL Energy Limited (ASX: AGL) share price has plummeted 13% over the last seven days, with most of that tumble attributed to the company's $1.1 billion first half loss.  

But there might be a silver lining to the downturn. AGL directors appear to have taken advantage of the dip, bolstering their stakes in the stock. Are they onto something?

Shares in the S&P/ASX 200 Index (ASX: XJO) energy retailer last traded for $6.89.

Let's take a closer look at the recent insider buying at AGL and what brokers are tipping for the future.

AGL insiders on a share buying spree

AGL insiders went on a buying spree yesterday, snapping up a combined 61,900 securities for a total of around $433,300.

The largest parcel was acquired by CEO and managing director Damien Nicks, who bought 27,000 shares in AGL for $189,000.

Non-executive director Christine Holman also snapped up a sizeable handful of shares, buying 13,000 shares for $91,000.

Chair Patricia McKenzie was in on the action too, forking out $49,000 for 7,000 shares in the company.

Finally, non-executive directors Vanessa Sullivan and Miles George bought 5,000 and 9,900 AGL shares respectively, paying $35,000 and around $69,370 for their individual parcels.

The approximate $7 price tag on each stock purchased by the insiders was notably higher than the $6.83 low inked by the AGL share price in recent sessions.

Though, it's 17% lower than the stock's January high of $8.215.

Are the directors onto something? Morgans thinks not

Broker Morgans is sceptical of AGL shares. It reiterated its hold rating and slashed its price target to $6.89 following the release of the company's earnings, my Fool colleague James reports.

The broker noted the results represented a significant disappointment, and while it expects the future to be brighter, it warns the path ahead could be fraught, saying:

We anticipate increasing dividends as earnings begin to recover in the next 12 months however we think the market will want to see clear evidence of this before it regains confidence in the company and the sector.

The post Company directors are buying the dip on AGL shares. Should you? appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

AGL Energy Limited (ASX: AGL)

The AGL share price is down 3.5% to $6.87. Investors have been selling this energy company's shares after brokers responded negatively to yesterday's half year update. Morgans was particularly disappointed, noting that "AGL's 1H result was a significant miss on consensus and our forecast and FY23 underlying net profit guidance was reduced by $20m."

New Hope Corporation Limited (ASX: NHC)

The New Hope share price is down 7.5% to $5.37. A number of coal miners are taking a hit on Friday amid weakness in the price of the black gold. According to CommSec, Coal Nymex futures were down 3.4% overnight to US$142.65 per tonne. This means that futures are now down 9.1% since Tuesday's session.

News Corporation (ASX: NWS)

The News Corp share price is down 6% to $28.23. This follows the release of the media giant's second quarter update. News Corp reported net income of US$94 million, down 64% from the prior corresponding period. The company also announced plans to slash its workforce by 5% in the 2023 calendar year.

REA Group Limited (ASX: REA)

The REA share price is down 3% to $120.63. Investors have been selling this property listings company's shares after its half year earnings fell short of expectations. REA reported revenue of $617 million and net profit after tax of $205 million. Goldman Sachs was expecting a profit of $208 million. Management also warned that it may not achieve its Australian positive jaws target in FY 2023.

The post Why AGL, New Hope, News Corp, and REA shares are dropping today appeared first on The Motley Fool Australia.

In morning trade, the energy company's shares are down 3.5% to $6.87.

This means the AGL share price is now down more than 13% since the release of the company's half year results.

Is the AGL share price weakness a buying opportunity?

Unfortunately, one leading broker doesn't believe investors should be jumping in just yet.

According to a note out of Morgans, its analysts have retained their hold rating and cut their price target on the company's shares by 12.5% to $6.89.

This is broadly in line with where AGL's shares trading today.

What did the broker say?

Morgans wasn't impressed with AGL's half year results, which fell short of expectations. It commented:

AGL's 1H result was a significant miss on consensus and our forecast and FY23 underlying net profit guidance was reduced by $20m. […] Underlying net profit was down 55% on pcp, 60% on our forecast and 45% on Visible Alpha consensus. The key driver was a net $123m impact on the wholesale trading business from the tight winter conditions earlier in the half. This also drove a big miss on DPS with an interim dividend of only 8cps.

The top end of FY23 guidance was cut, reducing the mid-point of Underlying net profit guidance by 8% to $240m.

And while Morgans is expecting AGL's performance to improve and its dividends to start increasing, it recommends investors sit on the fence for the time being. It adds:

We anticipate increasing dividends as earnings begin to recover in the next 12 months however we think the market will want to see clear evidence of this before it regains confidence in the company and the sector.

The post Is the AGL share price sell off a buying opportunity? appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to drop

The Australian share market looks set to fall again on Friday following another poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 21 points or 0.3% lower this morning. In late trade in the United States, the Dow Jones is down 0.5%, the S&P 500 is down 0.6%, and the NASDAQ index is 0.65% lower.

Oil prices fall

Energy producers Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued finish to the week after oil prices dropped overnight. According to Bloomberg, the WTI crude oil price is down 0.45% to US$78.09 a barrel and the Brent crude oil price is down 0.6% to US$84.50 a barrel. A buildup of US inventories put pressure on prices.

REA results

The REA Group Ltd (ASX: REA) share price will be one to watch on Friday. That's because the property listings company is scheduled to release its half year results and investors will be able to see how the slowing housing market has impacted its bottom line. Goldman Sachs expects a 3% decline in revenue to $606 million and a 6% decline in net profit to $208 million.

Gold price drops

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a poor finish to the week after the gold price slumped overnight. According to CNBC, the spot gold price is down 0.75% to US$1,877.3 an ounce. Traders appear nervous ahead of the release of key inflation data in the US.

AGL remains a hold

The AGL Energy Limited (ASX: AGL) share price may have crashed 10% on Thursday but Morgans isn't recommending investors jump in just yet. In response to the energy giant's half year results, the broker has retained its hold rating and slashed its price target to $6.89. Morgans said: "AGL's 1H result was a significant miss on consensus and our forecast and FY23 underlying net profit guidance was reduced by $20m."

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

Shares in AGL Energy Ltd (ASX: AGL) were hit with the proverbial sledgehammer on Thursday as hopes of a profitable half were slashed.

The company's share price powered down 10.33% to finish the day at $7.12 in reaction to the energy retailer's first-half figures for FY23. Today's disappointing performance was the worst for AGL shares in more than a year and seven months.

There's a good chance shareholders were shocked by the staggering after-tax loss of $1.075 billion. A loss that big makes you wonder how?

Blowing out the bottom line by a billion

Once upon a time, Australia's largest electricity generator was pumping out profits in excess of a billion dollars.

In 2018, AGL delivered revenue of $12.7 billion and net profit after tax (NPAT) of $1.26 billion. Today, the company posted $7.81 billion in revenue ($15.6 billion annualised). Despite achieving greater revenue years later, the energy giant is bleeding money — why is that?

For the most part, it comes down to standard accounting principles. This basically means financial statements need to recognise non-cash items on the profit and loss statement to provide a more accurate reflection of the business. And, oh boy, was the first half a pearler for non-cash items at AGL…

What wreaked havoc on the company's statutory earnings — sending AGL shares downwards — was one ugly asset impairment.

AGL wrote down the carrying value of its Energy Generation Fleet cash-generating unit — in other words, its coal-fired power station assets — as it plans to bring forward their closure dates.

The magnitude of the impairment was a ground-shaking $706 million post-tax.

Secondly, the company recognised a $622 million reduction in the value of its financial instruments. Large companies, such as AGL, often make use of various instruments to hedge their exposure to the underlying commodity — for example, oil and gas futures contracts.

When combined, the two blew a $1,328 million hole in AGL's earnings.

Where to for AGL shares from here?

Experts seemed to be split on the outlook for AGL following its first-half result.

On one hand, analysts at Barrenjoey considered it a 'less positive' foreshadowing for FY24. Whereas, Sarah Xie of Moody's indicated that higher earnings could be on the cards from FY24 to FY25 as old hedges expire and wholesale power prices strengthen.

One thing is for sure — shareholders will be hoping there are fewer days like today for AGL shares.

The post How to burn a billion dollars: AGL shares tumble 10% on painful half-year results appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

AGL Energy Limited (ASX: AGL)

The AGL share price is down 11% to $7.04. This follows the release of a disappointing half year result this morning. For the six months ended 31 December, AGL reported underlying net profit after tax of $87 million, which is a 55% decline on the prior corresponding period. This led to AGL slashing its dividend by half to 8 cents per share.

Dicker Data Ltd (ASX: DDR)

The Dicker Data share price is down a further 6.5% to $8.70. Investors have been selling the shares of this wholesale computer hardware and software distributor since the release of its unaudited full year results yesterday. Dicker Data reported a 25% increase in revenue to $3.1 billion but a small decline in net profit after tax to $73.4 million.

Megaport Ltd (ASX: MP1)

The Megaport share price is down 6% to $5.83. This has been driven by the release of the network as a service provider's half year results. Megaport reported a loss of $9.2 million and a reduction in its cash balance from $56.9 million to $39.2 million.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price is down 2.5% to $12.74. That's despite a large number of brokers responding positively to the banking and insurance giant's half year results from yesterday. For example, Morgans has retained its add rating and lifted its price target to $14.44, whereas Macquarie reaffirmed its outperform rating and increased its price target to $16.40.

The post Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) energy provider reported its half-year results for the six months ending 31 December this morning (1H FY23).

With the company struggling with plant closures amid what CEO Damien Nicks called "challenging energy market conditions", AGL saw its underlying net profit after tax (NPAT) fall 55% from the prior corresponding half year (1H FY22) to $87 million.

And that big drop in profits was reflected by a much lower AGL dividend payout.

What's happening with the AGL dividend?

The AGL board declared an interim unfranked dividend of 8 cents per share.

That's half the 16 cents per share dividend the company paid out in 1H FY22. And, if you're keeping track, it's 74% less than the 31 cents per share interim dividend paid in 1H FY21.

Management said the interim dividend is consistent with its policy to target a full-year payout ratio of 75% of underlying profit after tax.

Indeed, with 672.75 million shares outstanding and NPAT of $87 million, it falls close to that ratio.

The AGL dividend will be paid on 24 March.

The company's dividend reinvestment plan (DRP) is available to shareholders as an alternative to receiving cash payments. Investors wishing to participate in the DRP need to do so by 24 February.

Factoring in the intraday 10.7% fall in the AGL share price to $7.09 per share, the stock currently pays a trailing, unfranked dividend yield of 2.5%.

The post The AGL dividend has just been slashed. Here's what you need to know appeared first on The Motley Fool Australia.

The AGL Energy Ltd (ASX: AGL) share price is down 7.3% in early trade on Thursday.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy provider closed yesterday at $7.94 a share and are currently trading for $7.36 apiece.

This comes after the company reported a steep fall in earnings and profits for the first half of 2023 covering the six months to 31 December (1H23).

AGL share price sinks as profits plummet

The AGL share price is tumbling after the company reported underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $604 million, down 16% from 1H22.

Underlying net profit after tax (NPAT) tumbled a precipitous 55% from the prior corresponding half-year, to $87 million.

The energy provider reported a statutory loss after tax of $1.1 billion. That figure includes $706 million of impairment charges (post-tax) from the company's accelerated decarbonisation plans.

The board declared an interim unfranked dividend of 8 cents per share. That's down 50% from the interim dividend of 16 cents per share paid out for 1H22.

On a more positive note, AGL saw its total customer services notch up by 61,000 from the prior corresponding half year, to 4.3 million.

What did management say?

Commenting on the results sending the AGL share price lower today, CEO Damien Nicks said:

Our first half result reflects the impact of plant outages during challenging energy market conditions in July, the prolonged Loy Yang Unit 2 major outage caused by a generator rotor defect, and the closure of Liddell Unit 3 in April 2022, as we indicated in our FY23 financial guidance update in late-September 2022.

On the sustainability front, Nicks said, "The planned closure of the Liddell Power Station in April 2023 will be the next key milestone of [AGL's] accelerated decarbonisation pathway, reducing AGL's annual greenhouse gas emissions by approximately eight million tonnes per annum."

What's next?

The AGL share price also isn't receiving any tailwinds today after the company reduced the top end of its guidance.

The company's new guidance for underlying EBITDA is between $1.25 and $1.38 billion, while the previous guidance was between $1.15 and $1.45 billion.

Guidance for underlying NPAT is now between $200 and $280 million, while the previous guidance was between $200 and $320 million.

"We expect to have higher earnings in the second half of FY23, in line with guidance, and continued positive momentum into FY24," Nicks said.

AGL share price snapshot

As you can see in the chart below, today's selling action has seen the AGL share price dip into the red for the past 12-month period, down 2%.

The post AGL share price sinks following 55% profit dive appeared first on The Motley Fool Australia.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market is expected to drop on Thursday following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 32 points or 0.4% lower this morning. In late trade in the United States, the Dow Jones is down 0.45%, the S&P 500 has fallen 0.95%, and the NASDAQ has dropped 1.45%. The latter was impacted by Google parent Alphabet tumbling as much as 8% on AI competition concerns.

Suncorp rated as a buy

The Suncorp Group Ltd (ASX: SUN) share price could be in the buy zone according to analysts at Goldman Sachs. In response to its half year update, the broker has retained its buy rating and lifted its price target to $14.47. It said: "SUN's 1H23 underlying insurance margin have proven more resilient and are benefiting from what appears to be earlier repricing, stronger yields and better management of claims inflationary pressures."

Oil prices rise

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a good session after oil prices rose on Wednesday night. According to Bloomberg, the WTI crude oil price is up 1.6% to US$78.34 a barrel and the Brent crude oil price is up 1.5% to US$84.96 a barrel. This was driven by easing interest rate concerns.

AGL results

The AGL Energy Limited (ASX: AGL) share price will be on watch on Thursday when the energy company releases its half year results. According to CommSec, the market is expecting AGL to post a loss after tax of $47.3 million. The good news is that this isn't expected to stop the company from paying an interim dividend of 17.5 cents per share.

Gold price edges higher

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) will be on watch after the gold price edged higher overnight. According to CNBC, the spot gold price is up 0.25% to US$1,889.6 an ounce. Market volatility appears to have boosted demand for the safe haven asset.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) posted another loss on Tuesday, falling 0.46% to close at 7,504.1 points.

Seemingly weighing on the market was the Reserve Bank of Australia's (RBA's) move to hike the nation's benchmark interest rate for a ninth consecutive month.

The central bank added another 0.25% onto the cash rate today, bringing it up to 3.35% – a new 10-year high.

The S&P/ASX 200 Real Estate Index (ASX: XRE) plummeted amid the RBA's announcement, closing 1.6% lower.

Both the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) and the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) also slumped, falling 1.2% and 1.3% respectively.

Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) led the market, lifting 0.5% on stronger oil and coal prices.

So, with all that in mind, which ASX 200 shares defied the market's downturn to post today's biggest gains? Let's take a look.

Top 10 ASX 200 shares countdown

Today's top-performing ASX 200 share was coal producer New Hope Corporation Limited (ASX: NHC).

It rose 3.7% to close at $6.16 after Coal Nymex soared 5.3% overnight, leaving the black rock trading at US$157 a tonne.

These shares made today's biggest gains:

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.