The company’s dividend has been cut to $0.04 per share following additional provisions for advice remediation and a $100m top up to reserves.
Macquarie notes, while the capital position appears light, this should be rectified following completion of the Resolution Life transaction. However, any future capital management activities could be delayed while remediation expense programs are being run.
The broker maintains a Neutral rating and reduces the target to $2.50 from $2.70.
Target price is $2.50.Current Price is $2.34. Difference: $0.16 – (brackets indicate current price is over target). If AMP meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).