The AMP Ltd (ASX: AMP) share price has suffered a 21% drop this year and it has fallen even further (28%) from 13 February 2025, as the chart below shows. While it's been a rough period for ASX shares in the last couple of months amid the growing US trade war, AMP's decline has been particularly rough.
The decline seems to have been sparked by the FY24 result which was released on 14 February 2025.
On the face of it, the reported numbers didn't seem bad. However, clearly, investors were unsatisfied.
Earnings recap
The business reported its result for the 12 months to 31 December 2024, which showed total underlying net profit after tax (NPAT) rose 15.1% to $236 million. Underlying earnings per share (EPS) rose 25% to 9 cents per share, thanks to improved earnings and the positive effect of the share buyback. Statutory net profit came to $150 million. Profit is obviously a key input for confidence in the AMP share price.
Let's look at how the individual segments performed.
AMP said its platforms underlying net profit grew 18.9% to $107 million, with "strong" net cash flow momentum (with growth of 96.7%).
Superannuation and investments (S&I) underlying net profit grew 26.4% to $67 million, which reflected positive market conditions, reduced variable costs and improved cash flows.
AMP Bank revealed that its underlying net profit reduced by 22.6% to $72 million, with ongoing management of volumes and margins while developing the new digital bank.
The New Zealand wealth management underlying net profit rose 8.8% to $37 million, with continued diversification of revenue and disciplined cost control.
On the expenses side of the business, controllable costs by reduced 6.1% to $648 million.
What did experts think of AMP shares?
When the broker UBS saw the result, it noted the share price decline "reflected disappointment around both result quality and capital."
While overall wealth net outflows continue to moderate, progress here "disappointed against a backdrop of stronger peer outcomes" according to UBS.
The broker also noted there was disappointment related to the "limited prospects for further near-term capital management", with a weaker FY25 dividend outlook.
UBS then said:
While we are seeing a broader Platforms re-rate across the sector (IFL 3x private equity bids), attention may ultimately turn towards AMP's assets where prospects for growing North and moderating S&I outflows could be reasons to be incrementally more positive. However, AMP's bank continues to hinder a re-rate given ~6% Bank ROE. Retain Sell.
The broker has a price target of $1.35 on the business. That implies a possible rise of 7% because of how far the AMP share price has fallen in March.
UBS predicts AMP could make net profit of $280 million in FY25 and $302 million in FY26. It's trading at just over 11x FY25's estimated earnings.
