AMP has withdrawn 2020 guidance, but the sale of Life and NZ is progressing.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.
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).