Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 6 Mar, 24 | AGR | Buy | USD 31.77 | USD 36.0 | USD 39.0 | 2 days | 22.8% |
Data Powered by EOD Historical Data (“EODHD”).
Avangrid, Inc., an energy services holding company, engages in the regulated energy transmission and distribution, and renewable energy generation businesses in the United States. The company operates in two segments: Networks and Renewables. It is involved in the generation, transmission, and distribution of electricity; and distribution, transportation, and sale of natural gas. The company also operates renewable energy generation facilities primarily using onshore wind power, as well as solar, biomass, and thermal power. It delivers natural gas and electricity to residential, commercial, and institutional customers through its regulated utilities in New York, Maine, Connecticut, and Massachusetts; and sells its output to investor-owned utilities, public utilities, and other credit-worthy entities. In addition, the company generates and provides power and other services to federal and state agencies, as well as institutional retail and joint action agencies; and delivers thermal output to wholesale customers in the Western United States. It owns eight electric and natural gas utilities, serving 3.3 million customers in New York and New England, as well as owns and operates 9.2 gigawatts of electricity capacity primarily through wind power in 22 states. The company was incorporated in 1997 and is headquartered in Orange, Connecticut. Avangrid, Inc. is a subsidiary of Iberdrola, S.A.
Higher Gross Margin: 33.7% in FY2023 vs 33.1% in FY2022
Higher EBITDA Margin: 25.3% in FY2023 vs 24.5% in FY2022
Lower Return on Equity: 4% in FY 2023 vs 9.2% Industry Median
Lower Current Ratio: 0.65x in FY2023 vs 0.78x Industry Median
Macro-economic challenges, Global slowdown etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 31.77 | 29.0 | 36.0 | 39.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Financials: For Q4 FY23, consolidated net income stood at USD 397 mn as compared to USD 147 mn for Q4 FY22.
Technical: AGR has witnessed a drop of 19.4% in 1 year and 5.19% in last 6 months. The stock has 52-week high and 52-week low of USD 41.22 and USD 27.46 respectively.
Outlook: For FY24, the company is expecting adjusted EPS in the range of USD 2.17- USD 2.32, driven higher onshore installed capacity, O&M optimization etc. AGR key focus is towards core business growth and securing multi-year rate plans.
Given the aforementioned factors, a "Buy" recommendations has been assigned on the stock at the closing market price of USD 31.77 as on 5 March 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Utilities Industry: Utilities - Regulated Electric
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| AGR Avangrid Inc |
0.01 0.03% | 35.73 | 23.63 | 14.06 | 1.52 | 0.64 | 2.87 | 12.16 |
| NEE Nextera Energy Inc |
-0.4 0.50% | 80.10 | 15.77 | 17.61 | 4.52 | 2.61 | 7.10 | 12.28 |
| SO Southern Company |
-0.445 0.50% | 88.84 | 25.35 | 17.76 | 2.89 | 2.48 | 5.27 | 13.35 |
| DUK Duke Energy Corporation |
0.12 0.11% | 110.79 | 20.54 | 16.34 | 2.60 | 1.59 | 5.34 | 11.98 |
| NGG National Grid PLC ADR |
-0.35 0.53% | 65.55 | 15.63 | 13.83 | 2.41 | 1.32 | 5.05 | 14.80 |
Data Powered by EOD Historical Data (“EODHD”).
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and target levels is March 05, 2024. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Note 4: The report publishing date is as per the Pacific Time Zone.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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