- Piper Sandler & Co analyst Crispin Love upgraded Annaly Capital Management Inc NLY to Overweight from Neutral at a slightly increased price target of $21.5 (prior $20).
- The analyst is bullish on the above-consensus Q1 2023 results reported last week.
- NLY's Q1 core EPS exceeded the consensus of $0.76 and Piper Sandlers' estimate of $0.74.
- Love praises NLY's ability to achieve a positive economic return and maintain flattish tangible book value (outpacing agency mREIT peers) in Q1, amid a challenging market environment.
- NLY's diversified model of agency MBS, mortgage servicing rights, and residential credit strengthens the analyst's confidence in the stock and expects it to drive double-digit returns across strategies.
- The analyst expects agency spreads to tighten over the next year as the Fed reaches its terminal rate, which can drive the company's tangible book value.
- Although NLY decreased its quarterly dividend to $0.65 from $0.80 in mid-march, Love expects it to maintain the annualized dividend run rate of $2.60.
- The analyst increased estimates for 2023 operating EPS to $2.88 (from $2.83) and 2024 operating EPS to $2.80 (from $2.73).
- Price Action: NLY shares are trading lower by 2.07% at $18.92 on the last check Tuesday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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