Does AMP’s A$29 Million Advice Settlement Shift the Bull Case For AMP (ASX:AMP)?

• Earlier this week, AMP agreed in principle to pay A$29 million to settle a long-running class action over adviser-recommended in-house life insurance products, with no admission of liability and final approval still subject to the courts.
• This resolution marks another step in AMP’s effort to close legacy conduct issues following a recent A$120 million superannuation fee settlement, potentially reducing litigation overhang on its reshaped wealth, banking, and retirement business.
• We’ll now examine how resolving this A$29 million advice and insurance class action could influence AMP’s investment narrative and risk profile.

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AMP Investment Narrative Recap

To own AMP today, you need to believe its reshaped wealth, banking and retirement platform can convert ongoing digital and retirement demand into sustainable earnings, while keeping costs and litigation in check. The A$29 million advice and insurance class action settlement looks incremental beside existing legacy issues, and does not materially alter the near term focus on margins, AMP Bank GO’s earnings drag, or the broader execution risk in repositioning the business.

The most directly connected recent development is AMP’s earlier A$120 million superannuation fee class action settlement, another effort to clear historic conduct matters that have tied up capital and management attention. Together, these settlements sit alongside AMP’s investment in digital capability and retirement solutions as twin forces pulling in opposite directions on the near term narrative: simplification and growth initiatives on one side, and the cost, capital and reputational impact of legacy remediation on the other.

Yet while these legacy cases appear closer to resolution, investors still need to be aware of how ongoing litigation and remediation could...

Read the full narrative on AMP (it's free!)

AMP's narrative projects A$1.4 billion revenue and A$336.3 million earnings by 2028.

Uncover how AMP's forecasts yield a A$1.91 fair value, a 4% upside to its current price.

Exploring Other Perspectives

Two Simply Wall St Community fair value estimates for AMP span from A$0.90 to A$1.91, underlining how far apart individual views can be. Set against this, unresolved margin pressure and rising cost needs keep AMP’s earnings trajectory finely balanced, so it is worth comparing several of these perspectives before deciding how its repositioning story fits your portfolio.

Explore 2 other fair value estimates on AMP - why the stock might be worth as much as A$1.91!

Build Your Own AMP Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your AMP research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
• Our free AMP research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate AMP's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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