Why this top broker sees 16% upside for the AMP (ASX:AMP) share price

Here's where the AMP share price could be heading…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It certainly has been another disappointing year for the AMP Ltd (ASX: AMP) share price.

The embattled financial services company's shares have shed 31% of their value in 2021.

This means the AMP share price is now down a bitterly disappointing 80% over the last five years.

woman talking on the phone and giving financial advice whilst analysing the stock market on the computer with a pen

Image source: Getty Images

Is the AMP share price finally good value?

According to a recent note out of Citi, there could be value in the AMP share price at the current level.

The note reveals that the broker currently has a neutral (high risk) rating on the company's shares with a price target of $1.25.

So while the broker's rating is only neutral, with the AMP share price trading at $1.08, its price target implies potential upside of almost 16% over the next 12 months.

What did the broker say?

Citi has been pleased with the progress that AMP is making, though it acknowledges that there's still a lot of work to do.

It commented: "While AMP has clearly made some progress in 1H21, there is still a long way to go. There will be no dividend until at least 1H22 and earnings are guided to fall in 2H. However given the 1H beat on higher "investment earnings" we nonetheless lift our FY21E by 3% with little change to later years."

The broker also notes that there's still a large amount of uncertainty regarding the AMP Capital business and demerger, which explains why it is retaining its neutral rating despite its attractive price target on the AMP share price.

Citi explained: "As a new CEO takes the helm, it still remains unclear what shape AMP Capital will be in by the time of its targeted private capital markets demerger with its profit currently on a declining path. Further, while its remediation program is finished and there is progress in advice, there is still a long way to go to put the business on a profitable footing. Given slightly reduced, but still considerable, uncertainty we retain our Neutral/High Risk call and A$1.25 target price."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

A woman looks questioning as she puts a coin into a piggy bank.
Broker Notes

Buy, hold, or sell? Coles, Wesfarmers, BHP shares

ASX 200 shares are in the red as the global oil shock continues to concern investors.

Read more »

Health professional working on his laptop.
Broker Notes

Are Orthocell shares a buy after crashing 7% yesterday?

These healthcare shares could be on discount right now.

Read more »

a happy man eats pizza in his kitchen with a long string of cheese between the pizza slice in his hand and in his mouth.
Broker Notes

Buy, hold, sell: Collins Foods, Domino's, and Guzman Y Gomez shares

Bell Potter has given its verdict on these popular shares this morning.

Read more »

Man pointing an upward line on a bar graph symbolising a rising share price.
Broker Notes

Why WiseTech shares could rise 70%

Bell Potter is urging investors to buy this tech stock before it rebounds.

Read more »

A man leaps from a stack of gold coins to the next, each one higher than the last.
Broker Notes

Why this surging ASX All Ords stock is forecast to rocket another 142%

A leading broker expects this ASX gold stock could more than double investors’ money in the year ahead.

Read more »

A business person directs a pointed finger upwards on a rising arrow on a bar graph.
Broker Notes

Brokers name 2 skyrocketing ASX energy shares to buy today

Top brokers forecast further strong outperformance from these two surging ASX energy stocks. But why?

Read more »

Two brokers pointing and analysing a share price.
Broker Notes

Buy, hold, sell: Xero, Woolworths, CBA shares

Here's what the experts think of these sector giants.

Read more »

A young man goes over his finances and investment portfolio at home.
Broker Notes

NextDC vs Wesfarmers shares: Which is a buy?

Analysts have given their verdict on these shares this week.

Read more »