Goldman Sachs Starts Annaly Capital Management (NLY) at Sell

December 5, 2013 7:27 AM EST
Get Alerts NLY Hot Sheet
Price: $10.15 --0%

Rating Summary:
    5 Buy, 14 Hold, 6 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 29 | Down: 29 | New: 6
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Goldman Sachs initiates coverage on Annaly Capital Management (NYSE: NLY) with a Sell. PT $9.50.

Analyst Eric Beardsley comments, "We are Sell rated on NLY, as we expect book value to fall as rates rise and MBS spreads widen post Fed tapering. As NLY continues to take actions to protect book value by taking down leverage, rotating into shorter-duration assets and increasing its hedge ratio, we estimate earnings headwinds and dividend cuts of ~40%. We expect total returns of 2% over the next 12 months, which is relative underperformance compared to 10% average upside for the sector. This assumes book value declines 14% from 3Q13 levels to 4Q14 and that the stock to trades at 0.87x this level to $9.50 for 5% price downside (vs. current P/B of 0.79x). We also assume dividends of $0.80, implying a dividend yield of 8.0% off current price levels."

For an analyst ratings summary and ratings history on Annaly Capital Management click here. For more ratings news on Annaly Capital Management click here.

Shares of Annaly Capital Management closed at $10.05 yesterday.

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