The AMP Ltd (ASX: AMP) share price has pushed its way over the past month of trade as financial shares retain their position as one of the best performing sectors in H1 FY23.
The S&P/ASX 200 Financials (ASX: XFJ) index has ticked more than 9% higher in the past month of trade, ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)'s return of around 6% in the same time.
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Can the AMP share price keep up the pace?
After a string of capital budgeting moves that saw AMP sell off underperforming business segments, AMP has reshuffled its operations.
Consequently, AMP is now focused on growing its numbers and in the 2022 first quarter, it reported a total loan book increase of $500 million to $22.6 billion.
In addition, Inflows from external financial advisers increased by more than 50% to 342 million, prompting CEO Alexis George to remark on the company's "strong and sustainable future".
The other fact to consider is the effect of rising policy rates on the ASX financial shares bucket.
Rising interest rates are typically a net positive for companies within the financial services sector, seeing as a portion of income is tied to net interest income (NII). An industry benchmark is also the net interest margin (NIM) to compare between companies.
In other words, with the increase in interest rates comes the prospects of increasing NII and lifting NIMs to potentially increase profits. That's the thinking anyway.
As seen in the chart below, along with a surge in the Australian cash rate and the yields on the Australian Government 10-year note, the AMP share price has pushed its way north as well.
The question now becomes if AMP can sustain the pace of growth on the chart.
Brokers are positioned as such to say this might be a challenge. According to Refinitiv Eikon data, there is just 1 buy call on the share, with the remaining coverage split evenly between sell and hold.
The consensus price target from this list is $1.06 per share, suggesting the AMP share price could pull back to this level if the brokers are correct.
