Why Angel Oak Mortgage (AOMR) Shares Are Trading Lower Today - Angel Oak Mortgage REIT (NYSE:AOMR)

B of A Securities analyst Derek Hewett downgraded Angel Oak Mortgage Inc AOMR from Buy to Underperform and lowered the price target from $15.5 to $6.5.
Given its vertically integrated platform, he found AOMR ideal for the secular growth opportunity in the non-qualified mortgage (Non-QM) market.
AOMR also faced significant near-term headwinds, given elevated volatility across the fixed-income and securitization markets.
Specifically, wider credit spreads drove book value per share (BVPS) lower since AOMR’s assets were at fair value.
Additionally, illiquidity and dislocation in the securitization market have limited access to permanent non-course financing, which unlocked liquidity that could be recycled into new purchases.
While AOMR shares have meaningful underperformed peers and the dividend was reset lower in Q4, earnings visibility is low, and he believes risk remains skewed to the downside.
We think AOMR should trade at a discount to credit-sensitive peers.
AOMR’s economic return has significantly underperformed credit-sensitive peers and should continue to lag peers in the near term.
Price Action: AOMR shares traded lower by 6.69% at $6.21 on the last check Monday.

Angel Oak Mortgage Price Target Shaved By 58%, Analyst Downgrades Stock As Volatility Across Fixed-Income Markets Weigh