The AMP Ltd (ASX: AMP) share price is trading a little lower at the time of writing, down 0.89% and changing hands at $1.67 a piece.
Despite being in the red so far today, AMP's share price has surged 45.2% higher over the past three months, and is up 47.14% over the year.
Today's performance follows a strong second-quarter update from the financial services company yesterday.
The quarterly update revealed that AMP's Platforms net cash flows increased 63.2% from the prior corresponding period, to $1,565 million.
The company's Platforms assets under management also rose 5.6% quarter-on-quarter to $83.2 billion.
Here's Macquarie Group Ltd (ASX: MQG)'s stance on the stock following its latest results announcement.
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AMP rating downgraded
In a recent note to investors, the broker downgraded its rating on AMP shares to neutral from outperform. At the same time, Macquarie raised its 12-month target price to $1.70, up from $1.44 previously.
Based on the current share price of $1.67, this represents a potential upside of 1.79% for investors over the next year.
The broker explains why in its note:
We downgrade our recommendation to Neutral (from Outperform) following a +42% price appreciation in the last month. To become more bullish we need to see a live walk-through of the "best in class technology platform" and hear the strategy to achieve the ROE target in the Bank.
Macquarie notes that while AMP's Q2 2025 result was highlighted by strong investment markets and the first net inflows in its Superannuation & Investments (S&I) division since Q2 2017, the bank didn't make any comment about its strategic plans or net interest margin (NIM). It said:
Bank: AMP's GLAA's grew +$185m (+1.6% annualised growth) in the quarter. Closing GLAA [gross loans, acceptances, and advances] was $23.5b. No comment was provided on NIM, as is normally the case when AMP issues a quarterly update. Deposits contracted ~0.7% (vs. the prior corresponding period).
Other key observations: #1) No comment was made about strategic plans for the Bank; and #2) AMP's MyNorth Lifetime product on the platform is now at $465m ($510m at 1Q25). This is assisting the net flows growth for the division.
Despite the absence of some information, the broker still increased its earnings estimates for AMP for the coming years. It said:
Earnings changes: FY25E/FY26E of +0.6%/+2.5% reflecting stronger investment income in 2Q25; and +6.5% to +13.8% thereafter reflecting the compounding of the 2Q25 result for investments and flows.
