Citi upgrades AMP to 'buy' as outflows steady
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The news: Citi has upgraded its rating on wealth manager AMP, which reported improvements in its first-quarter superannuation outflows last week.
The numbers: Citi upgraded AMP from 'neutral' to 'buy' but cut its price target on the stock from $1.60 to $1.30. AMP shares last closed at $1.14, having retreated nearly 30% over the last 12 months.
The context: Citi's analysts said AMP's flows "look to have turned a corner" following four good quarters of platform flows. They noted that current market volatility could impact this positive momentum, but AMP's skew towards superannuation could offer potential mitigation.
Meanwhile, AMP's pending class action is likely to add more risk, with a further legal case looking set to be delayed until fiscal 2026. However, the analysts said AMP appears to have taken a conservative approach to its dividend targets to reflect possible class action outcomes.
What they said: "...the 1Q25 flows are generally positive and the stock as retreated a long way from its end Jan 2025 heights," the analysts said.
"This points to a value opportunity even if the timing of crystallisation may be difficult to perfect."
The source: ASX
