AMP has received final regulatory approval for the sale of the life business. Macquarie estimates this leaves AMP with around $950m in excess capital.
The broker anticipates investors will become more constructive on the business in the short term but considers the stock fully valued, highlighting the earnings risk over the medium term, particularly in wealth management.
Neutral maintained. Target rises to $1.85 from $1.20.
Target price is $1.85.Current Price is $1.89. Difference: ($0.04) – (brackets indicate current price is over target). If AMP meets the Macquarie target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).