Deutsche Bank Starts ARMOUR Residential (ARR) at Buy; Expect Earnings to Benefit from Slowing Prepayments

Deutsche Bank initiates coverage on ARMOUR Residential (NYSE: ARR) with a Buy. PT $7.75.

Deutsche analyst says, "We expect ARR to continue posting attractive returns, as the portfolio benefits from low financing costs and slowing prepayment speeds. We expect earnings to grow through 2012 as prepayments slow. We expect the dividend to remain at current levels. We are establishing a price target of $7.75 per share, which is based on applying a 15% premium to our pro forma book value estimate."

"Given ARR’s recently announced estimated 4Q earnings and selected financial data, we expect the company to report solid 4Q results. We expect earnings at the upper end of the company’s 4Q GAAP earnings range of $0.26 to $0.28 per share."

For an analyst ratings summary and ratings history on ARMOUR Residential click here. For more ratings news on ARMOUR Residential click here.

Shares of ARMOUR Residential closed at $7.02 yesterday.

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