AGL Energy (ASX:AGL) share price hits 52-week low

The AGL Energy Limited (ASX: AGL) share price has slumped to a new 52-week low after a busy April period for the Aussie energy group.

| More on:
Turning down AGL shares represented by man placing hands up in front of him and frowning

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The AGL Energy Limited (ASX: AGL) share price has been under pressure lately. Shares in the Aussie energy group fell 1.0% lower on Friday to close at $8.71 per share.

That's a new 52-week low for the electricity generator and retailer or 'gentailer', so what does May 2021 look like from here?

Why the AGL Energy share price is at a 52-week low

April was a busy month for the Aussie energy company. AGL announced on 30 March that it intended to create a demerger of sorts to create "two leading energy businesses".

That plan was unveiled by AGL managing director and CEO, Brett Redman. Mr Redman said there will be a structural separation of the existing group into:

  • "New AGL", Australia's largest multi-product energy retailer focused on low carbon; and
  • "PrimeCo", Australia's largest electricity generator.

The proposed structural separation was designed to give each business more freedom and further drill down into key areas of the Aussie electricity market.

That was all well and good, but the plan has changed. Mr Redman abruptly announced his resignation on 22 April and caused a rapid reshuffle at AGL during the month.

AGL chair Graeme Hunt will become interim CEO and managing director, while non-executive director Peter Botten has been appointed chair.

News of the leadership change saw the AGL share price fall lower in April. The announcement took many in the market by surprise given Mr Redman's short tenure and structural plans. The Aussie energy company has commenced a search for its next CEO willing to commit to the transition phase.

What else is happening for AGL?

Leadership changes weren't the only thing moving the AGL share price in April. AGL announced that its joint venture with Mercury NZ Ltd (ASX: MCY), Powering Australian Renewables (PowerAR), had increased its offer price to acquire Tilt Renewables Ltd (ASX: TLT).

The revised NZ$8.10 per share or NZ$3.07 billion offer came after Canadian pension fund CDPQ had lobbed a late competing offer for the Kiwi renewables group. That was ultimately enough to clinch the deal for Tilt over and above CDPQ.

There have also been concerns about testing domestic electricity and gas supply and demand issues. Market commentators and regulators continue to watch the market to ensure ongoing electricity security, particularly in the retail market.

Foolish takeaway

The AGL share price has been under pressure in April. Shares in the Aussie energy company are sitting at a 52-week low prior to Monday's open as the latest CEO departure makes investors wary.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

An oil worker on a tablet with an oil rig in the background.
Energy Shares

Buying Woodside shares? Here's the latest oil price forecast from Goldman Sachs

Here’s what Goldman Sachs is forecasting for the oil price in the year ahead.

Read more »

Natural gas plant engineer using a laptop.
Energy Shares

Santos share price pushes higher amid big Asian news

ASX investors are bidding up Santos shares on Friday.

Read more »

a man and his small son crouch in a green field under a beautiful sunset sky looking at renewable, wind generators for energy production.
Energy Shares

Non-oil energy investments are on the rise: Here are 2 to consider

Australian investors are turning their attention to non-oil energy stocks poised for growth.

Read more »

Oil rig worker standing with a clipboard.
Energy Shares

How much upside does Macquarie tip for Woodside shares?

With shares up 23% since April, here’s Macquarie’s 12-month forecast for the Woodside share price.

Read more »

A male oil and gas mechanic wearing a white hardhat walks along a steel platform above a series of gas pipes in a gas plant.
Energy Shares

Should I buy Santos shares today amid the ongoing $30 billion takeover offer?

With the $30 billion Santos takeover offer not yet finalised, should you buy shares right now?

Read more »

Workers inspecting a gas pipeline.
Broker Notes

What's Macquarie's price target for Origin Energy shares?

Could Origin be primed for a turnaround?

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

With an 8% dividend yield, should I buy Woodside shares for their passive income?

A leading expert offers his take on Woodside shares and the passive income on offer.

Read more »

Two brokers analysing stocks.
Energy Shares

Santos shares push higher on takeover update

What is the latest on this potential deal? Let's find out.

Read more »