The broker calls AMP’s earnings result “fairly sound” with strong performances in other businesses offsetting pressures in wealth management. The focus was on the probable sale of Life at a rebased price, a $650m equity raise that will be some -15% dilutive and $300m of targeted cost-cuts by FY22.
The broker is now more positive at the current stock price but highlights a high degree of execution risk and several years before cost-outs make their mark. Neutral retained, target falls to $1.80 from $2.00.
Sector: Insurance.
Target price is $1.80.Current Price is $1.93. Difference: ($0.13) – (brackets indicate current price is over target). If AMP meets the Macquarie target it will return approximately -7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
