It is fair to say that the last few years have been very disappointing for the AMP Ltd (ASX: AMP) share price.
Unfortunately for its long-suffering shareholders, so far in 2021, things have been equally bad for the financial services company’s shares.
Since the start of the year, the AMP share price is down 29%. This stretches its five-year decline to a sizeable 80%.
To put that into context, this means that a $10,000 investment in AMP’s shares in 2016 would be worth just $2,000 today.
Why is the AMP share price underperforming again in 2021?
Investors have been selling down the AMP share price this year following its disappointing performance in FY 2020.
For the 12 months ended 31 December, weakness across all four of its business units led to AMP reporting a 32.8% decline in underlying profit to $295 million.
In addition to this, the company revealed that its assets under management (AUM) fell 8% for its Australian wealth management business and 7% for its AMP Capital business. Management blamed some of this weakness on the Australian Government’s early release of super program.
Another factor that has been weighing on the AMP share price was the collapse of takeover talks between it and Ares Management for the AMP Capital private markets business. The company is now embarking on a demerger, which the market appears somewhat undecided on.
Is this a buying opportunity?
At present, none of Australia’s leading brokers have buy ratings on the company’s shares. This appears to have been driven by significant uncertainties hanging over the company and its future plans.
Though, it is worth noting that Ord Minnett currently has a hold rating and $1.35 price target on its shares. Based on the current AMP share price of $1.11, this implies potential upside of almost 22% over the next 12 months.