The AMP Ltd (ASX: AMP) share price has performed wonderfully in the last 12 months, rising by 70%. Today, during morning trade, it reached a new 52-week high of $1.64.
This could be the ASX financial share's best calendar year – it's currently up by 74% in 2024 to date, though the year isn't quite over yet.
The market is loving the operational recovery the business is displaying. Let's look at the latest update from the business that may have impacted AMP shares.
Quarterly recap
In mid-October, AMP announced to the market how its various segments had performed in the three months to September 2024.
The ASX financial share said its platforms net cash flows were $750 million, North inflows from independent financial advisers (IFAs) increased 47% year over year to $832 million, platforms asset under management (AUM) increased 4.5% quarter over quarter, and superannuation and investments AUM rose 3.3% to $55.8 billion, with a net cash outflow reduction of 46% to $334 million.
AMP also reported its New Zealand wealth management segment saw its net cash flows improve by $34 million to $40 million.
AMP Bank's total loan book increased $100 million during the quarter to $23 billion, and its total deposits rose $300 million to $20.9 billion.
The ASX financial share also noted its new partnership for the advice business is "on track", with completion of the transaction expected to occur before the end of the year. I think this is a pleasing development considering all of the trouble that segment has caused shareholders over the last five or six years.
Where to next for the AMP share price?
When UBS saw this update, the broker said that it revealed "solid improvements across key organic growth drivers for both its wealth and banking businesses."
However, while UBS said the progress with its business units is encouraging, it said there were medium-term challenges due to wealth funds under management (FUM) retention after divesting the advice business and, secondly, "improving its bank ROE to at least cost-of-capital", up from 6% in the first half of 2024.
The broker suggested that the AMP share price is on an expensive earnings multiple and that further capital management support, such as share buybacks, is "unlikely" in 2025. According to UBS' numbers, the AMP share price is valued at 15x FY25's estimated earnings.
That's why UBS has a sell rating on AMP shares and a price target of $1.20. This implies that the stock could fall by 26% within the next year.
