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On Thursday, UBS analyst Shreyas Patel upgraded AMP (OTC:AMLTF) Ltd (AMP:AU) (OTC: AMLYY) stock rating from ’Sell’ to ’Neutral’. The price target was adjusted to AUD1.30, down from the previous AUD1.35. Patel’s commentary highlighted the stock’s significant sell-off since the February results, which saw a 29% decline after a disappointing financial performance. The risks associated with AMP are now deemed more balanced, according to Patel.
Patel pointed out that despite the recent challenges, there are signs of recovery in several of AMP’s business segments. The moderation in Wealth outflows is one such indicator. Additionally, the potential for upside exists if AMP successfully realizes its equity-accounted investments, which could then be leveraged for capital management purposes.
The UBS analyst noted the company’s new, more detailed financial disclosures. These disclosures reveal that most of AMP’s business segments show signs of incremental momentum. This is seen as a positive development for the company, which has been working on stabilizing and improving its financial standing.
The potential realization of equity-accounted investments was specifically mentioned as a factor that could contribute positively to AMP’s capital management strategy. This could provide the company with additional flexibility and resources to manage its capital effectively.
In conclusion, the upgrade reflects UBS’s view that the risks and potential rewards for AMP are now more evenly matched. The new price target of AUD1.30 reflects a slight reduction from the previous target but indicates a neutral stance on the stock’s prospects.
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