The AMP Ltd (ASX: AMP) share price has had an incredible 12 months, rising by around 80%. With the upcoming FY24 result, investors have a lot to look out for in the annual report.
Investors seem much more confident about the business than they were at the start of 2024. Will the excitement be justified?
Coming into a reporting period, a share price typically reflects what investors expect a business to reveal, and the share price reaction on the day normally reflects how the numbers (and commentary on the outlook) compare to expectations.
AMP plans to release its FY24 results on 14 February 2025.
Expert projections
The broker UBS has made a number of predictions about the ASX financial share's upcoming report for the 12 months to December 2024.
UBS forecasts AMP could generate $303 million of revenue, $235 million of operating profit (EBIT), and $222 million of net profit after tax (NPAT). Based on these numbers, the projections suggest revenue and net profit growth of approximately 10% year over year.
Turning to the per-share statistics, the broker predicts that the ASX financial share could generate 8 cents of earnings per share (EPS) and utilise some of that to pay a dividend per share of 4 cents.
At the current AMP share price, that means it's trading at 22x FY24's estimated earnings with a possible annual dividend yield of 2.3%, excluding any possible franking credits.
I think the balance sheet is just as important as the profit numbers because it's an ASX financial share. It's important that financial institutions have balance sheet strength to enable stability through downturns.
UBS forecasts the (net) cash balance could drop by $130 million (compared to FY23) to $1.31 billion. But, that's still a large balance.
Commentary on the latest update
When AMP revealed its FY24 third-quarter update last year, UBS provided the following comments:
AMP's 3Q24 update revealed solid improvements across key organic growth drivers for both its wealth and banking businesses. Across wealth, net outflows (post pension payments) moderated to -0.6% pa of FUM, assisted by growth in Platforms (+1.3% pa of FUM) and slower declines in Super & Investments (-3.2% pa of FUM). Similarly, following three quarters of decline, AMP Bank's loan book stabilised in 3Q24, inching 0.4% higher. 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.
Rating on AMP shares
UBS thinks the AMP share price has risen too far. It has a sell rating on the business and a price target of $1.20. In other words, the broker suggests the ASX financial share could fall 30% in the next year.
