We set a target price for AMP of A$2.00. We value AMP on a sum of the parts basis, valuing Platforms at a PE multiple of 25x, and Superannuation & Investments at ~12x. We value AMP Bank at a PE multiple of 11.5x, and value NZ Wealth Management at a multiple of 11x prospective earnings. We value AMP’s holdings in CLPC, CLAMP, and PCCP at face value.

The main downside risks to achieving our target price reflect uncertainty in AMP’s cost out programs and capital return constraints, strategy, trajectory of platform margins, key staff departures and loss of funds management rights, further adverse regulatory outcomes and potentially negative sentiment form market volatility impacting net flows. 

Other risks include falls in the equity market; disappointment against market expectations for dividends, future sales, outlook statements, and/or valuation growth; and departures; and cost reductions being less than the assumptions underlying our target price.