Analysts have lowered their price target for AMP from $601 to $550, citing concerns over recent team departures and resulting net flows. They also note that management's efforts to adjust compensation packages are expected to maintain the distribution expense ratio within the 66% to 67% range.
Analyst Commentary
Analysts continue to weigh in on AMP’s outlook following recent Q3 results, voicing both optimism and caution in their evaluations. The stock’s valuation and future growth prospects hinge on several key themes.
Bullish Takeaways
- Bullish analysts highlight the company's proactive approach in adjusting advisor compensation, which is expected to help retain key distribution talent amid industry competition.
- Outperform ratings remain in place as overall business fundamentals are viewed as intact despite near-term headwinds.
- The anticipated stability in the distribution expense ratio, maintained within the targeted 66% to 67% range, is cited as a sign of effective cost management and execution.
Bearish Takeaways
- The reduction in the price target reflects ongoing concerns over negative net flows following recent advisor departures, with potential implications for future asset growth.
- Analysts are cautious about the impact these team exits may have on business momentum and client retention going forward.
- Some remain wary that increased compensation costs, while supportive of retention, may limit operational leverage and dampen near-term margin expansion.
What's in the News
- AMP Limited has reached settlement agreements with certain insurers regarding legal proceedings initiated to recover costs linked to historical remediation programs that ended in 2022 (Key Developments).
- As a result of these settlements, AMP has received approximately $44 million in proceeds from insurers so far (Key Developments).
- Discussions are ongoing between AMP and additional insurers in connection with an August 2025 hearing related to these legal proceedings (Key Developments).
Valuation Changes
- Consensus Analyst Price Target: Lowered from A$601 to A$550, indicating a moderate downward revision.
- Discount Rate: Remained unchanged at 11.72%.
- Revenue Growth: Stable at -20.2%, with no material change since the previous update.
- Net Profit Margin: Unchanged at 24.2%.
- Future P/E: Remained steady at 19.4 times.
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