Bank of America Merrill Lynch Reports on American Capital Agency

Bank of America Merrill Lynch commented on American Capital Agency AGNC in a report released yesterday. In the report, Bank of America Merrill Lynch was positive in its assessment of the company. Bank of America Merrill Lynch writes, “Our $30 price objective is based on a 1.2x P/BV multiple to the estimated Q4'11 book value, as we expect book value to remain relatively stable in the intermediate term. We believe AGNC's appealing dividend yield is offset by the potential downside risk to its BV. The benign rate environment and strong demand for Agency MBS suggest BV erosion may not be an immediate threat.” Bank of America Merrill Lynch currently has a Buy rating on American Capital Agency and a price objective of $30. Shares of American Capital Agency closed at $29.52 yesterday, flat on the day.