The AMP Ltd (ASX: AMP) share price has been out of form in 2023.
Since the start of the year, the financial services company's shares have fallen approximately 14%.
Conversely, on a 12-month basis, things are looking far better. As you can see on the chart below, its shares are actually up 14% during this period.
Where next for the AMP share price?
According to a note out of Citi, its analysts believe the AMP share price is about fair value at current levels.
The broker has retained its neutral rating and $1.15 price target on its shares, which implies modest upside of approximately 1.75%.
In addition, the broker has pencilled in dividends of 3 cents per share in FY 2023, which equates to a 2.65% yield.
What is the broker saying?
Citi has mixed feeling about AMP's recent announcement of its decision to sell its SuperConcepts SMSF admin and software business.
While it sees positives in the simplification of its business, it highlights that this is yet another disappointing investment that the company once had high hopes for. It commented:
AMP once had high hopes for its SuperConcepts business championing its leading market position in SMSF administration and promising growth in fund members and market share. However, ultimately the market proved too disperse and revenue growth proved elusive. So, the business continued to lose around A$5m or so per annum, dragging on overall performance.
The new, simplified AMP no longer has the appetite for the focus and investment this business now requires. So, despite the small loss on sale and the conclusion of another disappointing investment, we see its sale to Pemba Capital Partners as a small positive for both strategy and underlying earnings. We allow for a minor amount of stranded costs but nonetheless lift our FY23E- FY25E EPS by 1% including a small mark to market impact.
Citi's focus now is on AMP's upcoming half-year results and particularly its cost cutting plans. It concludes:
With all eyes on AMP's cost reduction plans to be announced alongside 1H23, we retain our Neutral call and A$1.15 TP.
