Rising retail tariffs in FY23, and the prospect for further rises in FY24, provide a strong tailwind for AGL Energy's vertically integrated position, according to Morgans. This comes as electricity futures reach new highs and exert upward pressure on wholesale pricing.

The company's generation assets support stronger margins as consumer prices increase, assesses the analyst. It's felt leadership issues should be resolved in time and the Add rating is retained, while the target price rises to $10.08 from $9.26.

Sector: Utilities.

Target price is $10.08.Current Price is $8.72. Difference: $1.36 - (brackets indicate current price is over target). If AGL meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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