The AMP Ltd (ASX: AMP) share price has delivered a stunning 70% rise in 2024 to date. In contrast, the S&P/ASX 200 Index (ASX: XJO) has climbed less than 10% over the same period.
Shareholders and interested investors may wonder whether the ASX financial share can outperform the market again in 2025.
It appears the market has been impressed by what the business has reported to investors in recent results. Of course, past performance is not a reliable indicator of future performance, and it appears the market has adjusted to AMP's improving situation.
The question now is what can the company achieve in 2025.
Let's have a look at what broker UBS thinks.
Recent commentary on performance
When UBS saw AMP's 2024 third-quarter update, it said that the ASX financial share was "slowly steadying the ship, though risks remain". The broker added that the quarterly figures showed "solid improvements across key organic growth drivers for both its wealth and banking businesses".
It noted that AMP Bank's loan book stabilised in the third quarter of 2024 after three quarters of decline, and the decline in its super and investments division was slower.
According to UBS:
While progress on both fronts is encouraging, we continue to see medium-term challenges from: (1) wealth FUM retention post divesting Advice, and (2) improving its Bank ROE to at least cost-of-capital from 6% in 1H24. With AMP at a 15.7x 12m PE and further capital management support into FY25E unlikely, we retain a sell rating.
Predictions about 2025
UBS predicts that in the 2025 financial year, which is also the 2025 calendar year, AMP could generate $357 million of revenue. This is 17.8% higher than the $303 million predicted for 2024.
The broker is forecasting that FY25 could see the business make $296 million of operating profit (EBIT), up 26% from the forecast for FY24.
Most importantly, UBS predicts that AMP could make $278 million of net profit after tax (NPAT) in 2025, representing a 25% rise compared to the projected amount for 2024.
In earnings per share (EPS) terms, AMP is projected to generate 11 cents of EPS in FY25. That puts the current AMP share price at 14x FY25's estimated earnings.
The ASX financial share is forecast to pay an annual dividend per share of 7 cents in the 2025 financial year. That translates into a possible dividend yield of 4.4%, excluding franking credits.
