AGL Resources, Inc. (GAS) - Bear of the Day

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We are maintaining our Underperform recommendation on AGL Resources, Inc. ( GAS ) with a target price of $35. We expect shareholder sentiment towards the company to remain lukewarm, considering its investment in higher-risk unregulated operations, ongoing regulatory uncertainties and the challenging economic environment.

AGL's earnings are likely to suffer in 2012 due to a less-than-favorable outlook at its wholesale segment. Additionally, the inclusion of the shipping operations (post-Nicor acquisition) has left AGL with a weak business, thereby heightening its risk profile.

Considering these factors, we see little reason for investors to own the stock and therefore maintain our Underperform recommendation. Our $35 price objective reflects a 2012 P/E multiple of 13.1x.
 
AGL RESOURCES (GAS): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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