ASX-listed AMP Limited (AU:AMP) is a financial services company that provides a whole range of services in Australia and New Zealand. It includes wealth management, banking, asset management, insurance, and other services.
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After gaining some momentum in the last year, the company’s shares started the year in the red zone with a decline of 16% YTD. Recently, in July, the stock again went down and lost around 6% in one day following the company’s cautionary statement about a potentially significant legal expense. Overall, the stock gained 5.75% in the last year.
Analysts have a mixed opinion on the AMP stock and have given it a Hold rating.
Let’s take a look at the details.
Will the Shares Rebound in the Future?
In its 2022 earnings, the company experienced a 34% decline in after-tax profits, primarily attributed to market volatility and a decrease in net interest margin within its banking segment. Nevertheless, it is crucial to consider that the company is currently undergoing a process of simplifying its business and refocusing on its core areas, namely banking and wealth management. As a result, this entails divesting operations and, consequently, reduced revenue and earnings.
Additionally, in its full-year results for 2022, the company’s variable costs were reduced by 18.8%, which is a significant step in the right direction. The company also announced a dividend after a gap of three years. The final dividend for 2022 was AU$0.025 per share at a yield of 2.31%.
The fiscal year 2023 is expected to be another year of transition for the company, emphasizing the importance of maintaining patience for investors with a Hold rating.
What is the Target Price for AMP?
13 days ago, analyst Kieran Chidgey from Jarden confirmed his Hold rating on the stock, predicting an upside of 13% in the share price.
Analysts at Ord Minnett are bullish on the stock and reiterated their Buy rating three months ago. The price target of AU$1.35 implies an upside of 27%.
Overall on TipRanks, AMP stock has a Hold rating with one Buy, two Hold, and one Sell recommendation. The average target price of AU$1.17 implies an upside potential of 10.6% in the share price.
Conclusion
Despite the positives, the company was not able to impress its shareholders as the numbers missed the consensus forecast. Nonetheless, analysts recommend holding the stock during its transition period, as it could potentially result in improved returns for investors.
