The AMP Ltd (ASX: AMP) share price has been gradually rising over the past couple of months.
Since hitting a low of 95 cents on 1 July, shares in the financial services company are now 22% higher.
At Thursday's market close, AMP shares were trading for $1.155 apiece, a 0.86% fall on the day.
Let's take a look at what one broker recently said about the company.
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AMP falling behind the pack?
While the AMP share price has been treading upwards, the team at Morgan Stanley believes the company is lagging behind its peers.
According to equity analyst Andrei Stadnik at Morgan Stanley, AMP Bank needs to re-invest in technology to stay competitive in the market.
Stadnik even went as far as to say that AMP is "sub-scale against even the regional banks".
Recent sales figures indicate the company is becoming more efficient with its operations following a string of asset sales. This includes offloading its funds management arm earlier this year to Digital Bridge for up to $699 million.
However, this could play against AMP as it takes away the "best growth opportunity" it had beforehand.
In 2021, the global asset management market was valued at $250.12 billion. This is projected to increase four-fold to $1,113.53 billion by 2028, representing a compound annual growth rate (CAGR) of 23.78% from 2022 to 2028.
While Stadnik noted that the new AMP has a robust financial model, it isn't the largest anymore and has a long road ahead to stabilise its books.
Morgan Stanley has an equal-weight rating on AMP shares with a target price of $1.10 apiece. Based on where it last traded as of yesterday, this implies a downside of around 5%.
It also stated that AMP is not cheap compared to the broader financial market, even when factoring in capital returns.
AMP announced a $1.1 billion capital return to shareholders on Thursday in its first-half result. This will consist of a $350 million share buyback program commencing immediately. The remaining $750 million will be returned in the following 2023 financial year through a mix of a special dividend or another share buyback.
However, given that asset sales reduce future earnings and AMP has returned capital to shareholders, the broker wasn't more positive about the company.
About the AMP share price
Founded in 1849, AMP provides superannuation and investment products, financial advice, and banking products, including home loans and savings accounts.
Headquartered in Sydney, the company operates in both Australia and New Zealand.
Year-to-date, AMP's stock has gained 14%. It is up by a similar amount over the past month, and has also gained 3.6% over the past year.
AMP presides a market capitalisation of roughly $3.81 billion with approximately 3.27 billion shares on issue.
