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AMP share price: where next following Q3 results?

The market reaction was subdued when the beleaguered wealth manager – AMP – revealed its Q3 FY19 assets under management and cash-flow update to the market yesterday. AMP's stock has risen around 3% since then.

AMP Q3 update in focus Source: Bloomberg

The AMP share price has risen steadily over the last five trading sessions – likely in anticipation of yesterday’s Q3 assets under management and cashflow update.

Yet that was mostly the end of it, with the AMP share price neither surging nor crashing in response to the actual Q3 numbers.

Indeed, that was also the impression given by management when they noted that ‘each of our businesses performed broadly as expected during the third quarter.’

The market seems in agreement; at last.

Q3 results at a glance

AMP looks to be making good on its promise of forging a simpler, stronger and more ‘scaled’ organisation.

For one, AMP Bank saw good deposit and loan book growth during the quarter.

Specifically, AMP Bank’s deposits have now reached the A$14.5bn milestone – an increase of A$0.6bn since the Q2 period. On this front, AMP noted that it had witnessed particularly strong growth ‘in retail and platform deposits reflecting AMP Bank’s strategy to move to a more deposit-led funded Bank.’

Though market conditions remained subdued, AMP Bank also saw its loan book hit A$20.3bn in the third quarter, an increase of A$0.1bn since the second quarter.

On the topic of wealth management – from which AMP is trying to diminish its reliance upon – the firm noted that its Australian wealth division ‘achieved stronger inflows during Q3, reflecting our improved fee competitiveness, but also higher outflows as the new Protecting Your Super legislation was implemented in Australia.’

Assets under management now stand at A$133.2bn as of 2019’s third quarter, for the AMP Australian Wealth Management Division.

AMP Capital’s assets under management also increased during the third quarter, reaching A$202.2bn.

AMP share price: the analyst take

Another quarter, another round of analyst opinions.

Citibank wasn’t impressed, for one. Though this is hardly surprise: the broader analyst community is also relatively sceptical – though less so than Citi – assigning AMP a hold rating, according to the Wall Street Journal. In this instance though, Citi downgraded their EPS target on the company, reiterated their ‘sell’ rating and hit AMP with a share price target of A$1.70.

Credit Suisse took a considerably more optimistic view on yesterday’s Q3 update, providing the analyst landscape with a bit more personality. Here, the investment bank noted that wealth inflows have began to recover, though Credit Suisse has still projected that FY19 underlying profit will come in a shade lower (0.1%) than previously expected.

This all led the investment bank to assign an ‘outperform*’ rating and a share price target of A$2.00 on the firm focused on reinventing itself.

At the time of writing, the AMP share price trades at A$1.85 – 24% lower than it did at the start of 2019.

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