Wunderlich Maintains Buy On Annaly Capital Management (NLY)

Wunderlich Securities is maintaining a Buy rating and a $18 price target on shares of Annaly Capital Management, Inc. NLY. In the research note, Wunderlich writes, "Annaly Capital Management (NLY) offered 75mm shares, raising more than $1.2 billion. We assumed that about half the raise was offset by marks against the company's interest rate swaps at year-end 2010, which is why we consider this action, in part, a defensive move. However, the company will likely be able to increase its portfolio size and earnings momentum, which we reflect in our revised 2011 estimate. NLY is not a one-trick pony, and has fee-based businesses under development that could support mid-teens ROEs, even on the back side of the rate cycle. We reiterate our Buy rating and $18 target, though we expect total returns to be lower in 2011 than in 2010." Shares of NLY lost 5 cents yesterday to close at $17.87.