The AMP Ltd (ASX: AMP) share price is having a tough time in 2023.
Since the start of the year, the financial services company's shares have lost approximately 19% of their value.
In light of this, some investors may be wondering if a buying opportunity has opened up for them.
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Is the AMP share price weakness a buying opportunity?
According to a recent note out of Citi, its analysts think investors should keep their powder dry for the time being.
The note reveals that the broker has a neutral rating and $1.15 price target on its shares.
Based on the current AMP share price of $1.07, this implies potential upside of 7.5% for investors over the next 12 months.
And with Citi expecting a 3 cents per share dividend in FY 2023, this boosts the potential return beyond 10%.
While this is still a decent return, the broker doesn't appear to believe the risk/reward is compelling enough to support an investment at this stage.
What did Citi say?
Citi believes there's potentially a lot to like about AMP. However, it is simply just too soon to jump in. It explains:
At face value, AMP now looks a lot simpler than it did. It now comprises only Australia and NZ wealth management and AMP Bank. However, its transition still seems incomplete as it has a higher cost base than it should (not least because of stranded costs from recent disposals) and several businesses that remain under earnings pressure, most notably Master Trust, Advice and SuperConcepts.
In time, addressing this should bring earnings upside and in the meantime capital is being returned with more to come. However, FY23E is set to be yet another transition year suggesting the need for ongoing patience. We reinstate full coverage with a Neutral call and A$1.15 TP.
