What this broker thinks of the AMP (ASX:AMP) share price after its update

Where next for AMP’s shares?

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The AMP Ltd (ASX: AMP) share price was on form last week and pushed 3% higher following its quarterly update.

This means the financial services company’s shares are now up 21% since the time last month.

Can the AMP share price keep rising?

One leading broker has been looking at the company’s third quarter update and given its verdict on the AMP share price.

According to a note out of Citi last week, its analysts have retained their high risk neutral rating and $1.25 price target.

Based on the current AMP share price of $1.17, this implies potential upside 6.8% for investors. Or 11% including Citi’s FY 2022 dividend estimate of 5 cents per share.

What did the broker say?

Citi notes that the company’s third quarter update was a little mixed.

It commented: “Overall AMP’s 3Q cashflows are a little weaker than we expected with a modest deterioration in flows for AWM removing the early release of super impact in pcp and sizeable outflows from AMP Capital, albeit a large proportion of this was previously flagged. North flows, however, rebounded. Bank loan growth was also a bit better than expected, while NZ also saw modest net outflows. Factoring this in sees very little change to our estimates, although we have also reassessed AWM’s likely margins etc, reducing our EPS by 4% in FY22E & 2% in FY23E.”

And while it sees value in the AMP share price, it isn’t enough for a change of rating due to high levels of uncertainty. Though, this could change after its investor day event next month.

Citi concluded: “AMP may be offering value but it remains too hard to tell currently with so many moving parts. We are, however, hopeful that the upcoming 30th Nov investor day may help to clarify some of these. In the meantime, we retain our Neutral/High Risk call and A$1.25 TP.”

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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.

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