Is Ameriprise Financial Inc (AMP) overvalued?
On Equity Rank's model estimate, AMP trades close to its fair value (6% below it). Ameriprise Financial Inc (AMP) last closed at $501.49; the multi-method model fair value is $536.47.
| Price | Model fair value | Price vs model |
|---|---|---|
| $501.49 | $536.47 | 7% below |
What the answer rests on
- 8 of 11 valuation methods put AMP's value above its price and 3 put it below, so the methods disagree.
- To justify today's price, AMP's free cash flow would need to grow about -10.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 24.5% a year.
- AMP trades at 11.9 times its last year's earnings, against a median of 13.6 for 97 profitable Asset Management companies.
- Over the past year the price sat below the model fair value on 98% of trading days. The gap ranged from 26% below to 0% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind AMP's fair value · What prices assume · Other companies