AMP Limited (AMLTF – Research Report), the Financial sector company, was revisited by a Wall Street analyst yesterday. Analyst Julian Braganza from Goldman Sachs upgraded the rating on the stock to a Buy and gave it a A$1.40 price target.
Julian Braganza has given his Buy rating due to a combination of factors that indicate a positive outlook for AMP Limited. The company is experiencing stable positive net flows in its Platforms segment, which includes pension payments, and while the S&I segment is still seeing outflows, the trends are improving. Additionally, there are opportunities for capital management beyond dividends, such as potential monetization of non-core equity stakes and lower platform capital requirements, which are not fully reflected in the sum-of-the-parts valuation.
Moreover, despite structural challenges in the banking segment, AMP’s bank could potentially outperform its peers in a lower interest rate environment. The ongoing efforts to reduce costs and the attractive valuation at approximately 10.5 times the 1-year forward earnings, compared to historical averages and the sum-of-the-parts valuation, further support the Buy rating. However, there is some risk associated with platform flows due to the sale of the advice business, although this may take time to manifest and is subject to market uncertainties.
In another report released on April 18, J.P. Morgan also upgraded the stock to a Buy with a A$1.35 price target.
Based on the recent corporate insider activity of 7 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of AMLTF in relation to earlier this year.