AGL Energy Limited (ASX: AGL) shares have been on a tear this year.
Since the start of 2023, the energy giant's shares have raced 42% higher.
So, with the company scheduled to release its full-year results on Thursday, clearly, expectations are high. But what is actually expected of AGL?
Image source: Getty Images
AGL results preview
The good news is that AGL has been keeping the market up to date with its performance this year.
As a result, we have a fair idea of what to expect when the company hands in its report card.
According to its most recent update, management is expecting to report underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) between $1,330 million and $1,375 million for FY 2023.
This will be an increase of 9.2% to 12.9% year on year from $1,218 million in FY 2022.
On the bottom line, the company is expecting underlying profit after tax of between $255 million and $285 million. This represents a year-on-year increase of 13.3% to 26.7%.
A recent note out of Macquarie reveals that its analysts expect this to lead to a full-year dividend of 31 cents per share being paid. This would be a 19% increase on the 26 cents per share dividend it paid in FY 2022.
What else should you look for?
One of the things that has been lifting AGL shares this year is management's bold guidance for FY 2024.
If you thought that AGL's earnings growth this year was solid, wait until you see what it expects to report in the new financial year!
Management has guided to underlying EBITDA of between $1,875 million and $2,175 million, as well as underlying profit after tax between $580 million and $780 million.
The mid-point of its EBITDA guidance implies a 50% increase year on year from the middle of FY 2023's guidance range. Whereas its underlying profit after tax guidance suggests that profits could more than double in FY 2024.
Investors may want to look to see if management narrows its guidance. If it is narrowed to the upper end, then AGL shares could take off. And vice versa if it is narrowed to the lower end of its range.
It is worth noting that Macquarie downgraded AGL's shares last week on the belief that the risks are now to the downside for the company's earnings in the coming years due to softer demand. It will be worth looking for signs of this in Thursday's update.
