Up 13% in July, can the AMP share price maintain its momentum?

A man sits at a desk with a phone in one hand, his other hand on his chin and studies a computer screen in front of him with what appears to be cryptocurrency data on both screens.A man sits at a desk with a phone in one hand, his other hand on his chin and studies a computer screen in front of him with what appears to be cryptocurrency data on both screens.

The AMP Ltd (ASX: AMP) share price has pushed its way over the past month of trade as financial shares retain their position as one of the best performing sectors in H1 FY23.

The S&P/ASX 200 Financials (ASX: XFJ) index has ticked more than 9% higher in the past month of trade, ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)’s return of around 6% in the same time.

Can the AMP share price keep up the pace?

After a string of capital budgeting moves that saw AMP sell off underperforming business segments, AMP has reshuffled its operations.

Consequently, AMP is now focused on growing its numbers and in the 2022 first quarter, it reported a total loan book increase of $500 million to $22.6 billion.

In addition, Inflows from external financial advisers increased by more than 50% to 342 million, prompting CEO Alexis George to remark on the company’s “strong and sustainable future”.

The other fact to consider is the effect of rising policy rates on the ASX financial shares bucket.

Rising interest rates are typically a net positive for companies within the financial services sector, seeing as a portion of income is tied to net interest income (NII). An industry benchmark is also the net interest margin (NIM) to compare between companies.

In other words, with the increase in interest rates comes the prospects of increasing NII and lifting NIMs to potentially increase profits. That’s the thinking anyway.

As seen in the chart below, along with a surge in the Australian cash rate and the yields on the Australian Government 10-year note, the AMP share price has pushed its way north as well.

TradingView Chart

The question now becomes if AMP can sustain the pace of growth on the chart.

Brokers are positioned such to say this might be a challenge. According to Refinitiv Eikon data, there is just 1 buy call on the share, with the remaining coverage split evenly between sell and hold.

The consensus price target from this list is $1.06 per share, suggesting the AMP share price could pull back to this level if the brokers are correct.

The post Up 13% in July, can the AMP share price maintain its momentum? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Amp Ltd right now?

Before you consider Amp Ltd, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Amp Ltd wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

See The 5 Stocks
*Returns as of July 7 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/Yf9EWIB

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s