Up 10% in a month, are AMP shares worth buying back into now?

The AMP Ltd (ASX: AMP) share price has charged ahead in the past month, but is it still a buy?

AMP shares have leapt 10% from $1.165 at market close on 21 October to the current share price of $1.285. For perspective, the S&P/ASX 200 Index (ASX: XJO) has jumped 6% in the same time frame.

Let’s take a look at the outlook for the ASX financial share.

What’s ahead for AMP?

UBS equity analyst Scott Russell has placed a sell rating on the AMP share price. However, he has increased his price target from 95 cents to $1, the Australian Financial Review reported.

In comments cited by the publication, UBS analysts said:

AMP has successfully divested its insurance and funds management operations, which both simplifies the group and provides for a very strong balance sheet. Capital returns will likely defend the stock for the time being.

Thereafter we remain concerned by the mid-term outlook for the continuing businesses. AMP continues to face fundamental challenges across both banking and wealth management segments and the future shape of the group is unclear.

AMP is a major financial services company that has been operating for more than 170 years.

Meanwhile, Bennelong Kardinia Absolute Return Fund portfolio manager Kristiaan Rehder recently described AMP as a company that is “of particular interest”, having been “out of favour for some time”.

Commenting on AMP, Rehder said:

Our analysis shows that there’s considerable excess capital. And we think it can surprise the market in regards to the extent of its capital returns in the near term.

On the news front, as my Foolish colleague Brooke reported on 15 November, AMP’s sale of the Collimate capital is facing some regulatory delays. However, significant progress has been made towards this transaction. AMP said:

All parties are working constructively together towards completion, and we will update the market on the likely completion dates for both transactions as these approvals progress.

AMP share price snapshot

The AMP share price has climbed 10% in the past year, while it has soared 27% in the year to date.

For perspective, the ASX 200 has fallen more than 3% in the past year and 4% in the year to date.

AMP has a market capitalisation of about $4 billion based on the current share price.

The post Up 10% in a month, are AMP shares worth buying back into now? appeared first on The Motley Fool Australia.

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More reading

• Is it finally safe to buy ASX shares now?
• ASX 200 shares may have just hit the bottom: AMP economist
• Looking to buy AMP shares? Here’s the latest blow to the company’s major divestment
• Why did the AMP share price just crack a new 52-week high today?
• Don’t panic! Here are 7 reasons we can avoid a recession: AMP

Motley Fool contributor Monica O’Shea 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.

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