We're now less than a month out from Christmas. So can ASX 200 financial services stock AMP Ltd (ASX: AMP) reach $1 a share in the next few weeks?
In Christmas parlance, AMP shares have been anything but the gift that has kept on giving. Earlier this year, it looked as though the veteran financial services company had turned something of a page on its past five tumultuous years. The company rose from under $1 per share in March all the way up to $1.31 by mid-September, a gain worth more than 33%.
But unfortunately, it's been downhill for AMP shares ever since. Today, the company is back languishing at 93 cents a pop, around the same level as it was as we approached the Christmas of 2021, two years ago.
The latest pessimism over AMP came back in the middle of this month. That was when AMP announced that it would be launching a new digital banking service aimed at small businesses and sole traders.
However, it appeared that investors were more concerned over the trading update that the company also gave to investors. AMP revealed that it expects its net interest margins (NIMs) to continue to be "affected by current market conditions" and remain under pressure over the 2024 financial year.
At the time of this announcement, AMP shares cratered by almost 15%, tanking from $1.01 each down to a new 52-week low of 84 cents. Although the shares are at 93 cents today, we'd still need AMP to put on more than 7.5% by Christmas if the company is to get back to $1 a share.
So how likely is this?
Can AMP shares hit $1 each by Christmas?
Well, nothing can ever be ruled in or out on the share market. But this move does appear to be unlikely. AMP has no more significant events scheduled for the rest of 2023. No earnings, no dividends and no market updates. That means that there is probably not going to be anything out of the company itself that will move AMP shares in a big way.
Of course, AMP could pull something out of its hat. But on the balance of probability, we'd have to assume that the next big update from the company will come in 2024.
However, that doesn't mean that sentiment for AMP can't improve. We could see a big investor make a large investment in AMP shares. That alone could see AMP back at $1. Or else, if the S&P/ASX 200 Index (ASX: XJO) has an exceptional Santa rally in December, this could well pull AMP back over that gold-coin threshold.
Saying that, one ASX expert doesn't think that's too likely. As my Fool colleague Tristan covered earlier this week, ASX broker Baranjoey has recently raised its rating on AMP shares to neutral. However, it has given the company a 12-month share price target of 96 cents.
If Barranjoey reckons AMP shares can only get to 96 cents by Christmas 2024, 2023 seems like a long shot from this angle.
Stranger things have happened though. So let's see what December brings for AMP shares.
