Global Pandemic Another Headwind for AMP, but the Turnaround Should Eventually Come

Factoring in volatile markets and an economic downturn, we’ve cut our near-term forecasts on fund inflows, market returns, loan growth, net interest margins, or NIM, and increased forecast impairments. Accordingly, our fair value estimate for AMP falls to AUD 1.60 per share, from AUD 1.95 previously. Our new valuation implies a midcycle P/E ratio of 15.8 times and dividend yield of 3.3%. Our narrow moat, high fair value uncertainty, and Poor stewardship ratings are reaffirmed as we transition coverage of AMP to a new analyst.