$30 Target, Buy Rating Kept On American Capital After Strong Quarter (AGNC)

Wunderlich Securities is keeping its Buy rating and $30 price target on shares of American Capital Agency Corp. AGNC after the real estate company reported a solid June quarter. In the report, Wunderlich writes, "American Capital Agency Corp. (AGNC) reported GAAP EPS of $1.23 per share for 2Q10. Adjusted for non-cash items, earnings were $1.80 per share, which fell short of our $2.14 estimate on the same basis. The difference was in trading gains, which fell short of our estimate, but spread income exceeded our estimate, and book value increased by 2.75%. Portfolio restructuring is ongoing, and we think that by retaining value creation and building book value, Agency has the potential to increase its operating earnings year-over-year into 2011, validating our high estimate. We maintain our Buy rating and $30 price target." Shares of American Capital are falling, down 91 cents to $27.13.