AMP – Macquarie rates the stock as Neutral

AMP has withdrawn 2020 guidance, but the sale of Life and NZ is progressing. The broker has marked to market for funds under management but also adjusted remediation assumptions (80% already paid) to remove some duplication of earlier numbers. The broker also anticipates some margin improvement given lower client fund balances attract higher fees than higher balances.

FY21-22 forecast earnings fall -22-30% on mark to market and lower bond yield forecasts. Target falls to $1.20 from $1.75. Neutral retained.

Sector: Insurance.

Target price is $1.20.Current Price is $1.24. Difference: ($0.04) – (brackets indicate current price is over target). If AMP meets the Macquarie target it will return approximately -3% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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