Earnings for both AGL Energy (ASX:AGL) and Origin Energy's (ASX:ORG) Energy Markets are expected to remain in line with expectations for the fiscal year 2026, with a potential upside if wholesale electricity price volatility increases in June, Jefferies said in a Friday note.

Continued moderation in electricity prices is driven by improved reliability of coal-powered electricity generation combined with renewable generation and storage, as demand continues to grow. Electricity demand in April is up 2% on the prior-year period, with renewable generation accounting for 44.2%, increasing 5.1 percentage points year-over-year.

Peak volatility is expected from June to August.

It forecast earnings before interest, taxes, depreciation, and amortization (EBITDA) of AU$2.13 billion for AGL, in line with the mid-point of guidance range at AU$2.12 billion, but 0.7% below consensus.

It also forecast EBITDA of AU$1.68 billion for Origin, 1.8% above the guidance range mid-point of AU$1.65 billion.

The investment firm has buy ratings for both AGL and Origin and set a price target of AU$12.76 per share for AGL and AU$13.04 per share for Origin.