AGR

STRUCTURED ANALYST NOTE Date: 2026-06-13 Ticker: AGR (Avangrid, Inc.) Current Price: $36.02

1. Structural Readiness

State: Context-Only Conservative Entry: — (Awaiting confirmed breakout) Aggressive/Pre-Breakout Entry: — (Not actionable on forming structure alone) Current Price: $36.02 Extension: — ATR Current: 0.5% (Sub-threshold volatility)

Analysis of Setup:

2. Thesis Layer

Thesis Classification: Tactical, Setup-Led Secular Exposure: None Named Assessment: There is no named secular thesis attached to AGR at this specific date. The investment case is strictly TACTICAL, driven by the quality of the technical setup (Deep Value Recovery archetype) and the underlying business fundamentals. We do not invent a macro thesis to force a fit. The conviction must be derived entirely from the structural readiness of the chart and the strength of the earnings/guidance data available as of the event date.

3. The Business

Company Profile: Avangrid, Inc. operates as a U.S.-based energy services holding company, functioning as a subsidiary of Iberdrola, S.A. The company is organized into two primary segments:

• Networks: Regulated energy transmission and distribution.
• Renewables: Renewable energy generation.

Operational Scope: The company provides essential services to approximately 3.3 million residential, commercial, and institutional clients across New York and New England via eight regulated utility companies. The Renewables segment generates power primarily from onshore wind farms, supplemented by solar, biomass, and thermal technologies. Power is supplied to a diverse base including investor-owned utilities, public utilities, and federal/state agencies.

Key Fundamentals & Management Expectations (Source: 2024-02-22 Earnings Transcript):

• Earnings Outlook: Management introduced 2024 outlook ranges for EPS of $2.17 to $2.32. The midpoint of this outlook represented an 8% increase from 2023 adjusted EPS.
• Regulatory Tailwinds: The company received a final decision on rate cases for its New York companies, authorizing over $6 billion of investments.
• Renewables Capacity: As of the reporting date, 990 megawatts were under construction. This included 472 MW of renegotiated PPAs and 526 MW of new PPAs signed in 2023.
• Data Center Demand: Approximately 700 megawatts of these projects were designated to support data centers with clean energy from onshore wind and solar.
• Capital Expenditure: Management expected additional CapEx spending of over $600 million in 2024 to support these initiatives.

Current Financial Context (Source: 2026-06-12 Financial Spine): Forward consensus estimates project FY1 EPS of $2.505 and FY2 EPS of $2.75, indicating a continued growth trajectory in earnings power relative to the 2024 guidance.

4. Archetype and Conviction

Archetype: Deep Value Recovery Rationale: The name fits the Deep Value Recovery archetype. The business model is anchored in regulated utilities (Networks) which provide stable cash flows, combined with a high-growth renewables segment (Renewables) that is capitalizing on the data center power demand. The "Recovery" aspect is supported by the regulatory clarity (final rate case decisions) and the execution of a multi-billion dollar investment plan.

Valuation & Conviction Stack:

• Thesis Strength: Moderate. The lack of a named secular thesis limits the "story" premium, but the business fundamentals are robust.
• Evidence Quality: High. The evidence base includes specific earnings guidance, regulatory decisions, and clear CapEx plans.
• Structural Quality: Moderate. The setup is "Forming," meaning the structural quality is present but unconfirmed. The sub-threshold ATR (0.5%) suggests the stock is currently quiet, which is typical for a forming coil but lacks the momentum required for a high-conviction entry.
• Rerating Potential: Dependent on the confirmation of the breakout. The forward EPS growth (from $2.17-$2.32 range in 2024 to $2.505 in FY1) provides a fundamental floor for valuation expansion if the technical setup confirms.

5. Invalidations, Strengths, and Gaps

What Would Strengthen the Case:

• Fundamental: Management reiterating or raising the 2024/2025 EPS guidance above the current consensus, or confirming the successful commissioning of the 990 MW under construction.
• Regulatory: Additional favorable rate case decisions in New England or New York.

What Would Invalidate the Case:

• Fundamental: A significant miss on the forward EPS consensus ($2.505) or a delay in the $6 billion investment plan.
• Macro: A sudden shift in regulatory policy regarding renewable energy subsidies or data center power procurement in the NY/NE region.

Gaps in Evidence Base:

• 2025/2026 Specifics: While 2024 guidance and FY1/FY2 consensus are available, specific management commentary for the 2025-2026 period (beyond consensus) is not detailed in the provided evidence.
• Debt Structure: No specific data on leverage ratios or interest coverage is provided in the evidence block, which is critical for a capital-intensive utility.

PRIVATE ANALYST CALL

Judgment: Hold Confidence: medium Key risks: 1. Sub-threshold ATR (0.5%) indicates low volatility and potential for stagnation. 2. Technical setup is incomplete (Forming, not Confirmed). 3. High capital intensity requires sustained execution of $600M+ annual CapEx. Sizing hint: Position size should be minimal or zero until breakout confirmation; current setup does not warrant full allocation. Expected horizon: 3 to 6 months for structural confirmation or invalidation.