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The A2 Milk Company Ltd (ASX: A2M) share price has come under significant pressure on Wednesday morning.

At the time of writing, the embattled infant formula company’s shares are down 12% to $6.03.

Why is the A2 Milk share price falling?

Investors have been selling down the A2 Milk share price today following the release of its highly anticipated investor update.

That update revealed management’s new strategy which is focused on rebuilding the company into an exciting, innovative and sustainable growth company. This strategy is largely focused on capturing the full potential of the China IMF market and ramping up product innovation.

However, any hopes that these plans would return A2 Milk to previous levels of explosive earnings growth appear to have been dismissed by management.

Growth targets

The update reveals that A2 Milk has set itself a medium term (≥ 5 years) target of growing its sales to NZ$2 billion.

While this is a big increase on FY 2021’s COVID-impacted sales of NZ$1.2 billion, it is only a modest increase on FY 2020’s pre-COVID sales of NZ$1.73 billion. This demonstrates just how much has changed in the key China market over the last 12 months.

In addition, the prospect of the company’s EBITDA margin returning to FY 2020’s level of 31.7% any time soon has also been ruled out. Management advised that it is targeting EBITDA margins “probably” in the teens in the medium term due to expected market conditions, investment, and innovation.

It is also worth noting that there are a number of uncertainties that could still impact these targets. This includes the pace of recovery in cross-border trade post COVID-19, how the competitive landscape will evolve in China, and the extent and pace of change in consumer product and channel preferences. The latter relates to Chinese consumers’ growing preference for domestic brands over international brands.

As a result, management warned that “because of these uncertainties and the range of potential outcomes, it is very difficult to define future state targets and when they will be achieved – the path is also unlikely to be linear.”

And if there’s one thing that market hates, it is uncertainty. Which goes some way to explaining why the A2 Milk share price is deep in the red today.

The post A2 Milk (ASX:A2M) share price crashes 12% on investor update appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Openpay Group Ltd (ASX: OPY) share price is trading higher on Wednesday after the company announced its official launch in the United States.

At the time of writing, the Openpay share price is 1.81% higher to $1.41.

Openpay live in lucrative US market

Openpay is now live and transacting in the US healthcare market. More specifically, it’s operating in the veterinary sector via its partner ezyVet.

ezyVet is currently distributing Openpay services across its 1,200 US veterinary hospitals and clinics through its leading practice management platform.

“The US specialty veterinary market has high transaction values for procedures such as MRIs, CT scans, and reconstructive surgery,” Openpay said.

“OpyPay is conducting a controlled roll-out with the first live OpyPay ezyVet locations in California, Michigan, Virginia, and Ohio.”

Openpay believes it provides the US market with a differentiated payments solution. It is looking to offer consumers flexible instalment plans designed for larger purchases in sectors including healthcare, dental, auto repair, education, and big-ticket retail.

Management commentary

Openpay’s CEO and Global Chief Strategy Officer Brian Shniderman hailed the milestone:

We’re thrilled to announce the successful US launch of OpyPay – a milestone for the Openpay Group and a clear affirmation of our US strategy.

Our longer, larger, customized installment plans are built for life’s unexpected and important expenses, such as emergency dental surgery, sudden auto repair, and medical care for a beloved pet.

In partnership with ezyVet, OpyPay will be made available to 1,200 US clinics as the rollout progresses – and we look forward to other partnerships to efficiently access our target verticals.

Openpay share price snapshot

The Openpay share price has declined 37% year-to-date, broadly consistent with its struggling small cap peers such as Splitit Ltd (ASX: SPT) and Laybuy Holdings Ltd (ASX: LBY).

However, it’s managed to stabilise in the last three months, holding around the $1.30 to $1.40 level.

The post Openpay (ASX:OPY) share price rallies as services go live in the US appeared first on The Motley Fool Australia.

More reading

• Openpay (ASX:OPY) share price jumps 13% on US update
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Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of Facebook (NASDAQ: FB) sank 3.9% on Tuesday, following the release of the social media giant’s third-quarter results. 

So what 

Facebook’s revenue jumped 33% year over year to $29 billion, driven by continued growth in its core digital ad business. Those gains, however, fell short of Wall Street’s expectations for revenue of nearly $29.6 billion. 

Facebook’s monthly active users of 2.91 billion and average revenue per user of $10 also fell short of consensus estimates of 2.93 billion and $10.15. 

Still, Facebook remains enormously profitable. Its operating income surged 30% to $10.4 billion. And its earnings per share of $3.22 actually came in ahead of analysts’ estimates of $3.19. 

Now what 

Investors are concerned that Facebook will find it difficult to navigate Apple‘s new privacy restrictions, which have dented its ability to target its customers’ ads. Facebook offered somewhat muted guidance to account for these challenges. Management anticipates revenue of $31.5 billion to $34 billion in the fourth quarter, while analysts’ forecasts had called for $34.8 billion in sales. 

Additionally, Facebook is dealing with a maelstrom of criticism and scrutiny from regulators after numerous reports of the company failing to properly address misinformation, hate speech, and other troubling behavior on its sites.

Yet these concerns are arguably already reflected in Facebook’s stock price. The social media titan’s shares can currently be had for less than 20 times its projected earnings for 2022 — a relative bargain compared to many other growth stocks.

Facebook apparently thinks its stock is a buy. The company increased its share repurchase program by a hefty $50 billion. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Facebook stock fell on Tuesday appeared first on The Motley Fool Australia.

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Joe Tenebruso has no position in any of the stocks mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Apple and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Humm Group Ltd (ASX: HUM) share price opened lower on Wednesday after the company released its investor strategy day presentation.

At the time of writing, the Humm share price is 0.54% lower at 92 cents.

Humm’s big reveal

Humm revealed two major announcements this morning. The first was a return to dividends commencing in the first half of FY22.

Humm is one of the only profitable ASX-listed buy now pay later companies. It delivered a cash net profit after tax (NPAT) of $68.4 million in FY21.

Its profitability makes it look relatively cheap from a price-to-earnings perspective, trading at just 7 times FY21 NPAT.

Humm said that its board approved the recommencement of dividends with a payout ratio of 30% to 40%.

In addition, Humm highlighted that “following significant market interest, hummgroup is currently exploring a possible divestment of the New Zealand commercial business”.

Humm noted that its current New Zealand commercial portfolio consists primarily of laptops, telecommunications, and office equipment with an average transaction value of $9,000.

The divestment is subject to any proposed sale meeting management’s valuation expectations.

Humm first quarter results

Humm released its first-quarter results on Friday last week, recapping another strong period of sustained growth.

Some key highlights include:

• Group 1Q22 total transaction volume (TTV) rose 39.6% against the prior corresponding period (pcp) to $763.3 million
• BNPL TTV up 44.5% to $308.8 million
• Total hummgroup customers rose 6.1% to 2.7 million including a 16% increase in BNPL customers

The company was pleased with the performance of its BNPL segment, consisting of humm, bundll and hummpro. The 44.5% increase in TTV was driven by strong volume growth in its humm ‘little things’ campaign in Australia.

Despite an encouraging performance, the Humm share price closed Friday’s session just 0.55% higher to 91 cents.

Humm share price snapshot

The Humm share price is down 16% year-to-date, broadly in line with the struggling BNPL sector.

The post Humm (ASX:HUM) share price falls despite revealing recommencement of dividends appeared first on The Motley Fool Australia.

More reading

• Humm (ASX:HUM) share price edges higher on first quarter results
• These were the best performing ASX BNPL shares in September

Motley Fool contributor Kerry Sun 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 recommended Humm Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Electro Optic Systems Hldg Ltd (ASX: EOS) share price has returned from its trading halt and is tumbling lower.

At the time of writing, the communications, defence, and space company’s shares are down 3.5% to $3.48.

Why is the EOS share price tumbling lower?

Investors have been selling down the Electro Optic Systems (EOS) share price today after the release of an announcement.

Although the company has announced the receipt of a major customer payment, this has been offset by a downgrade to its earnings guidance for FY 2022.

According to the release, EOS has received $65 million of cash receipts relating to a major export contract. This has boosted its total cash at bank to in excess of $100 million, including a $35 million working capital facility.

This cash receipt relates to a $440 million contract to supply significant quantities of its remote weapons systems to the UAE, which has been experiencing delivery disruptions.

Looking ahead, because EOS is producing continuously for this $440 million contract, it notes that the value of the contract asset going forward will vary according to the production, invoicing and payment cycles under the contract. As a result, in future the company intends to comment on this contract in the normal course of reporting.

Earnings guidance

Taking the shine off the above and weighing on the EOS share price is news that the company is downgrading its earnings guidance.

It now expects FY 2022 underlying EBIT before SpaceLink costs to be between $4 million and $8 million. This is a reduction from its prior guidance of $18 million to $21 million

Including SpaceLink costs, EOS’ underlying EBIT is expected to be a loss of between $11 million and $15 million. This compares to its previous guidance for a profit of $1 million to $4 million.

The company advised that this reflects $11 million of profit deferred to 2022, $3 million increased investment in business development, and $2 million expansion of SpaceLink outlays.

SpaceLink funding requirements

EOS also provided the market with an update on its funding requirements for the SpaceLink business. Much like Elon Musk’s SpaceX, the SpaceLink business is aiming to create a constellation of satellites in Medium Earth Orbit to provide internet connectivity anywhere on Earth.

Management notes that the funding requirement for SpaceLink will be ~US$700 million through to positive cash flow. Positively, this is less than initially budgeted.

EOS intends to apply at least US$300 million of debt, with around US$400 million of equity capital split over multiple tranches to meet the US$700 million requirement.

The first tranche of the funding requirement will be met through a SpaceLink pre-IPO convertible note, which is currently under discussion with investors.

The EOS share price is now down 41% in 2021.

The post Electro Optic Systems (ASX:EOS) share price tumbles on guidance downgrade appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Life360 Inc (ASX: 360) share price is storming higher on Wednesday.

In early trade, the mobile app maker’s shares are up 6% to a record high of $10.54.

Why is the Life360 share price rising?

The catalyst for the rise in the Life360 share price today is the release of the company’s third quarter update.

According to the release, Life360 delivered underlying revenue growth (excluding Jiobit) of 45% year-on-year to US$29.3 million. This means that Life360’s Annualised Monthly Revenue (AMR) (excluding Jiobit) reached US$120.1 million at the end of September. This is 48% higher than a year earlier.

Consolidated revenue, which includes the Jiobit acquisition, rose 47% over the prior corresponding period to US$29.7 million.

Life360 reported an underlying EBITDA loss of US$3.2 million excluding Jiobit and US$3.7 million including it. This left the company with a cash balance of US$50.4 million. Management remains confident its strong capital position represents sufficient resources to fund future growth.

What were the drivers of its growth?

A key driver of its growth was another solid increase in its Global Monthly Active User (MAU) base.

It reached 33.8 million at the end of September. This is a 31% increase year on year and an increase of 1.5 million since the end of June. The latter was despite the expected churn from the TikTok viral surge that inflated the previous quarter.

Life360’s user base comprises 22.2 million MAU in the US (up 1.9 million from the June quarter) and 11.6 million International MAUs. The latter was down slightly since the June quarter due to roll off from the TikTok surge.

Another positive was that its Global Paying Circles increased 26% year on year or 10% quarter on quarter to 1.1 million. Management notes that US Paying Circles increased 28% year-on-year, benefiting from the launch of the new Membership offering in July 2020. Its net subscriber additions of more than 104,000 was a second consecutive quarterly all-time record, increasing 15% on the June quarter.

Finally, also heading in the right direction was its Average Revenue Per Paying Circle (ARPPC). It increased 24% year-on-year and 8% quarter on quarter. Management notes that ARPPC for new cohort Membership subscribers was a 39% uplift from the first half of 2020.

In light of this strong performance, the company has increased its 2021 AMR guidance. It now expects AMR in the range of US$125 million to US$130 million for the core business. This is up from its previous guidance of US$120-US$125 million.

Strategic review

Life360 revealed that it is in active negotiations with potential acquisition targets that will accelerate its vision of being the dominant platform for a much broader suite of family services. It advised that this includes transactions that could simultaneously result in a dual listing on a US exchange.

Regardless of the outcome of any M&A transaction, Life360 has engaged advisors to begin the process to dual list on a US exchange in 2022.

Management commentary

Life360’s Chief Executive Officer, Chris Hulls, commented: “This was another milestone quarter for Life360, with growth continuing to accelerate in the US as the country emerges from COVID-19. We are excited by the metrics the business is delivering, in particular the second consecutive quarter of record subscriber additions taking us to more than 1.1 million Paying Circles, underlying revenue growth of 45% year-on-year and reaching US$120.1 million in Annualised Monthly Revenue for the first time. As a result of this momentum, we have upgraded our CY21 AMR guidance.”

“Monthly Active Users continued to increase from the second quarter despite the expected roll-off of lower quality users from the viral surge in downloads we experienced that quarter from TikTok. While there was some modest decrease in international MAU due to the viral surge and regions with greater pandemic restrictions, this was in line with our expectations. US MAU growth was robust, increasing by 1.9 million from the June quarter to 22.2 million, reflecting the traditionally strong US Back-to-School period.”

The Life360 share price is up 170% in 2021.

The post Life360 (ASX:360) share price hits record high on Q3 update and guidance upgrade appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Life360, Inc. 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 Bruce Jackson.

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The Betmakers Technology Group Ltd (ASX: BET) share price is falling on Wednesday.

At the time of writing, the betting technology company’s shares down 1% to $1.24.

Why is the Betmakers share price falling?

Investors have been selling down the Betmakers share price higher today despite the release of a first quarter update which revealed explosive growth.

According to the release, the company recorded cash receipts of $21 million during the quarter. This represents a 135% increase over the previous quarter and a 437% increase over the prior corresponding period.

A key driver of this growth was the company’s acquisition of Sportech. This game-changing acquisition completed on 18 June, which meant the first quarter was the first full quarter of ownership.

In addition, management reported growth in its Australian platform and the Managed Trading Services operations within the Global Betting Services business segment. Pleasingly, this growth is expected to continue during the remainder of FY 2022 as the company delivers on its expanded customer pipeline now under contract.

Despite the jump in cash receipts, Betmakers recorded a net operating cash outflow of $1.5 million for the period. Nevertheless, it ended the period with a strong net cash position of ~$109 million.

BetMakers Chief Executive Officer, Todd Buckingham, commented: “The past quarter is a very pleasing result for the Company. We have seen an impressive uplift on our strong base of domestic operations while also capturing growth in global markets that were identified by the Company as opportunities for us to expand our B2B wagering technology products and services globally.”

“BetMakers has a very clear strategy for growth in Australia and the United States, and is investing in the US opportunity, which we believe has the potential to be significant. Our rollout for Fixed Odds in the US, starting in New Jersey, progressed during Q4 FY21 after being passed unanimously by the Senate and General Assembly, and signed into law by the Governor of New Jersey. Everything is on track and we are excited about the journey ahead,” he added.

Bookies Card

Betmakers’ performance all looks likely to be boosted by a deal with EML Payments Ltd (ASX: EML).

It has partnered with EML Payments to launch the Bookies Card. Management notes that this is an innovative B2B Mastercard for the global wagering industry.

The Bookies Card is a prepaid reloadable Mastercard that allows cardholders to transfer money between their bookmaker accounts via its website and withdraw funds by using the card at any ATM.

Mr Buckingham commented: “We are very pleased to see the BetMakers’ Bookies Card ready for launch, having developed the card as a B2B innovation in partnership with EML. We are always looking for ways to help our partners in every way possible, whether that’s reducing resource cost, improving margins or acquiring clients. The Bookies Card website will feature functionality for users to sign up to accounts for all participating bookmakers from one site as well as pay for betting products to assist them with their betting.”

The post Betmakers (ASX:BET) share price falls despite 437% cash receipts increase appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Afterpay Ltd (ASX: APT) share price is having a fortnight to remember.

At close of trade yesterday, shares in the buy now, pay later (BNPL) service are trading for $126.64 – up 3.3% on the previous day and 10.4% over the last 2 weeks. Compared with the S&P/ASX 200 Index (ASX: XJO), which is up 2.3% in the same time, it is a rather impressive feat.

So, what’s going on? Let’s take a closer look.

Why the Afterpay share price is rising?

As most people may be aware, Afterpay is being acquired by fintech giant Square Inc (NYSE: SQ) for what was, at the time, $39 billion.

The deal is entirely in scrip. For every 1 Afterpay share an investor owns, they will receive 0.375 shares of Square. At the time, Square shares were worth US$247.26, implying a transaction price of $126.21 per Afterpay share.

Since then, the Square share price has been on the rise. Just in the last 2 weeks, shares in the company have appreciated 10.4%. Taking into account fluctuating exchange rates between the US and Australia, it pretty much matches the rise in the Afterpay share price.

This makes sense. Afterpay now has a fixed value, and that’s 0.375 times the value of Square’s shares. Afterpay shares will move in the same direction, and at the same rate, as those of its soon-to-be buyer.

The deal will not be finalised until the third quarter of FY22, so this should continue for some time to come.

So why is the Square share price lifting?

As explained by The Motley Fool, the Square share price is on the rise because of expectations.

The company is due to report its Q3 earnings next week, and analysts are tipping them to be a stellar result for the company. The Motley Fool Australia’s own Scott Phillips likes to say earnings season is more about expectations than results. Investors think Square is going to report good results and want to get on that gravy train early.

And if Square is doing well, then the Afterpay share price is doing well.

The post Why is the Afterpay (ASX:APT) share price up 10% in just 2 weeks? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Microsoft Corporation (NASDAQ: MSFT) share price is inching higher on Wednesday morning. This comes after the technology titan dished out its numbers for the first quarter of FY2022.

At the time of writing, shares in US-based tech company is up 1.7% in after-hours trade to US$315.35. However, soon after after-hours trading opened, the Microsoft share price set a new all-time high of US$315.89.

What’s moving the Microsoft share price?

Record quarter found up in the clouds

Microsoft shareholders would be jumping for joy following the latest quarterly figures. After the US market closed, the 46-year-old tech company showed investors it’s still got it, posting tremendous growth and expectation beating numbers.

According to the release, Microsoft reported revenue of US$45.3 billion in Q1, representing an increase of 21.9% year-over-year. Likewise, the company achieved US$2.71 of earnings per share (EPS) during the quarter. This was an astonishing 49% higher than the prior corresponding period — as well as being a quarterly record.

Both of these figures were above analysts’ estimates. Although, Microsoft did explain that US$3.3 billion of its US$20.5 billion profit was from a one-time income tax benefit.

Additionally, the continued growth story of cloud featured prominently in today’s numbers. In fact, it was the biggest driver of growth during the quarter. The ‘intelligent cloud’ business segment experienced a 30.6% increase in sales to US$16.96 billion in Q1. This considerable growth is likely pushing the Microsoft share price higher.

Meanwhile, revenue from personal computing increased a more conservative 12% to US$13.3 billion. Reportedly, the PC division was impacted marginally by a slowdown in PC shipments.

All in all, the company’s 22% revenue growth rate in the first quarter is the highest year-over-year growth since 2014. Demonstrating the power of Microsoft’s push into the cloud since the entry of CEO Satya Nadella.

Microsoft Revenues were up 22% over the last year, its highest YoY growth rate since 2014. $MSFT

Data via @ycharts pic.twitter.com/KXGfiKH91X

— Charlie Bilello (@charliebilello) October 26, 2021

https://platform.twitter.com/widgets.js

Management and analyst commentary

Despite the lack of high growth in PC shipments, the company’s involvement in multiple technological aspects has meant Microsoft continues to thrive during disruptions.

Commenting on the quarter, CEO Satya Nadella stated:

Digital technology is a deflationary force in an inflationary economy. Businesses — small and large — can improve productivity and the affordability of their products and services by building tech intensity.

Additionally, research firm Gartner believes the weakness in PC sales is a byproduct of the COVID-19 rollout and subsequent reopenings. Specifically, consumers are tending to spend their money elsewhere than electronic goods as they head back out into the world.

In light of this, UBS analysts have a buy rating on Microsoft with a share price target of US$350.

The post Microsoft (NASDAQ:MSFT) share price climbs after a record quarterly profit appeared first on The Motley Fool Australia.

More reading

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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Microsoft. 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 Bruce Jackson.

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The AMP Ltd (ASX: AMP) share price has accelerated 17% since this time last month after bottoming out. The company’s shares hit an all-time low of 88.5 cents on 22 September as weak investor sentiment took hold.

Nonetheless, buyers quickly pushed up the price of AMP shares following some progress made during the first-half of FY22.

At Tuesday’s market close, the financial services company’s shares dipped 0.86% to $1.155.

What’s been the catalyst for the rise in AMP shares?

Despite the release of its Q3 FY21 trading update last week, AMP has been relatively quiet on the news front. This, however, hasn’t stopped investors snapping up its shares as it entered a mini-bull run.

The company reported that its capital assets under management (AUM) fell to $180.3 billion, a drop of 4.04% compared to the first-half. The impact was primarily caused by net cash outflows which came to $12 billion for the quarter. In context, net cash outflows totalled $2.4 billion in Q3 FY20.

In AMP’s New Zealand wealth management portfolio, AUM increased to $12.9 billion, up $300 million quarter-on-quarter. The sound result was driven by investment market gains which offset net cash outflows of $39 million.

The strong scorecard prompted global investment bank Citi, to reiterate its outlook to a neutral (high risk) rating for AMP. In addition, the broker slapped a price target of $1.25 apiece, implying an upside of 7.6% on the company’s shares.

Citi’s analysts noted that it remains unclear what shape AMP Capital will be in following its private capital markets demerger.

AMP could provide more clarification on its investor day which is scheduled for 30 November.

AMP share price snapshot

Over the past year, AMP shares continued on a downhill trend to break the psychological $1 barrier, before surging higher. In that timeframe, its shares have recorded losses of around 15% for investors, with year-to-date falling more than 25%.

Based on today’s price, AMP presides a market capitalisation of roughly $3.4 billion, with approximately 3.2 billion shares on issue.

The post Why has the AMP (ASX:AMP) share price leapt 17% in a month? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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