It is fair to say that 2021 has been another very disappointing year for the AMP Ltd (ASX: AMP) share price.
Since the start of the year, the financial services company's shares have lost a massive 42% of their value.
This means the AMP share price is now down 82% over the last five years.
What's the outlook for the AMP share price in 2022?
Next year looks likely to be a very eventful one for the AMP share price due to its planned demerger of the Private Markets business.
This will see the company split into two and the Private Markets business trade separately on the ASX boards.
Last month management revealed the rationale for the demerger. It is to enable the two businesses to increase focus on their respective markets and growth opportunities.
This is AMP Limited as a retail wealth manager in Australia and New Zealand, and PrivateMarketsCo as a global manager of infrastructure and real estate investments with a growing focus on international institutional clients.
What do brokers think?
The team at Citi see potential for the AMP share price to rise meaningfully in 2022. However, they still believe it is too soon/risky to recommend it as a buy.
Following its investor day update, the broker retained its high risk neutral rating and $1.25 price target.
Based on the current AMP share price of 91 cents, this implies potential upside of 37% for investors over the next 12 months.
Citi commented after the event: "There is a lot to digest and it is difficult to factor all guidance provided into existing forecasts given recuts to occur once GEFI is sold, etc. However, from what we can tell, we highlight no investment income from Resolution in 2H21, lower AMPC fee income due to margin pressure, etc. and ~A$20m of stranded FY22 costs as near-term negatives. There will also be incentive costs for Private Markets Co."
"However a potential halving of the normalised advice loss in FY22E and targeted cost saves in PrivateMarketsCo are more positive factors. We lower our FY21 EPS by 6% but lift our FY23E EPS by 4%. While the material provides welcome further transparency and on FY23 earnings the stock looks inexpensive, there remain a lot of moving parts. So, for now, we retain our Neutral, High Risk call and A$1.25 TP," it added.
