Down 23% in February, time to sell this ASX 200 financial stock?

A leading expert forecasts the ASX 200 financial share may continue to struggle in 2025.

S&P/ASX 200 Index (ASX: XJO) financial stock AMP Ltd (ASX: AMP) has had a February to forget.

Just how bad has the month been for shareholders?

Well, AMP shares closed out January trading for $1.79. In afternoon trade today, shares are swapping hands for $1.38 apiece. That sees the AMP share price down 22.9% so far in February.

For some context, the ASX 200 is down 3.3% over this same period.

Now, if we take a step back, the ASX 200 financial stock has still strongly outperformed the benchmark index over the last 12 months.

While the ASX 200 has gained 7.8% over the year, AMP shares remain up 24.1%. AMP shares also trade on a 2.2% partly franked dividend yield (part trailing, part pending).

As you can see in the chart below, much of this month's pain was delivered on 14 February, when the company reported its full-year 2024 results. The AMP share price closed the day down a sharp 14.9%.

And with those full-year results in mind, Medallion Financial Group's Stuart Bromley recommends selling AMP shares (courtesy of The Bull).

A man looking at his laptop and thinking.

Image source: Getty Images

ASX 200 financial stock under pressure

"Shares in this diversified financial services company were punished following the result," Bromley noted.

Commenting on those results, Bromley said:

While management has worked hard to turn the share price around in the past 12 months, AMP's recent full year 2024 report revealed statutory net profit after tax of $150 million had fallen 43.4% on the prior corresponding period. Total revenue of $1.252 billion was down 1.1%.

And he expects the ASX 200 financial stock may garner less interest from passive income investors moving forward.

"Also, management reduced the company's final dividend from 2 cents last year to 1 cent this year," Bromley said. "This may lead to yield hungry investors looking elsewhere."

What's been happening with AMP?

The big fall in AMP's statutory net profit after tax in 2024 was spurred by higher spending on the company's business simplification plans as well as the losses incurred on the sale of its Advice business, completed on 2 December.

Although it did little to stem the hefty share price losses on the day, management highlighted that the ASX 200 financial stock achieved a 15.1% year on year increase in underlying net profit after tax to $236 million.

Looking to the year ahead, AMP CEO Alexis George said:

Having successfully completed the Advice transaction in December 2024, AMP is positioned to drive growth and build on opportunities in our wealth businesses to become a pre-eminent retirement specialist, and as a leading digital bank.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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