AMP share price: what’s the outlook as FY20 guidance is withdrawn

Beleaguered wealth manager AMP has today joined a long list of companies who have withdrawn their full-year guidance as a result of the coronavirus (Covid-19) crisis.

Mind you, even though its FY20 guidance has now been retracted, the wealth manager assured the market that its capital and liquidity positions were strong, as well as stressing that it remained committed to executing on its previously announced ‘transformation’ strategy.

Regardless of such assurances, amidst broad market gains, the AMP share price was still bid some 1.32% lower in the first 30-minutes of trade on Thursday, to a low of $1.125 per share.

Though a 1.32% decline is hardly disastrous – against a backdrop of rapidly declining earnings and an up-turned wealth management industry – AMP’s equity has faced high levels of selling pressure for some time now; well before the Covid-19 crisis emerged.

In the last month alone the AMP share price has declined close to 40%; in the last year it has fallen 46% and in the last five years a staggering 82% of value has been wiped out.

For point of reference, in August 2019 the wealth manager raised some $650 million of fresh capital at $1.60 per share, a position well under water at current price levels.

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CEO comments at a glance

Stock gyrations aside, the company today reiterated that its much-hyped sale of AMP Life remains on track to be completed by 30 June; that the divestment from its New Zealand wealth management operations continue; and that its client remediation program is set to be fully finalised by 2021.

In other words, besides pulling its FY20 guidance, AMP’s cornerstone ‘transformation’ projects remain unaffected by the coronavirus.

Speaking more generally to the Covid-19 impact – AMP’s CEO – Francesco De Ferrari said:

'In response to uncertainty in Australia and globally, we have taken decisive action to support our clients and people, while working to maintain the strength and resilience of our business.'

'Whilst the situation is rapidly evolving, our immediate priorities are to support the public health efforts, help our clients make the right choices, and ensure our people are safe and working in healthy environments. Protocols and contingency plans are also in place to ensure our operations and client services can continue throughout the pandemic,’ Mr De Ferrari further noted.

According to the Wall Street Journal (WSJ); overall, the analyst consensus on the wealth manager’s prospects remain subdued, with analysts rating AMP a Hold overall, made up of 2 Buy ratings, 8 Hold ratings and 2 Sell ratings.