Compass Point on Agency Mortgage REITs: Adjusting Rating/Numbers on MITT, WMC, MTGE, AGNC, AMTG, CMO, CYS
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Price: $20.54 +0.74%
Rating Summary:
7 Buy, 2 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 12 | New: 30
Rating Summary:
7 Buy, 2 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 12 | New: 30
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Compass Point on Agency Mortgage REITs: Adjusting Numbers and Rating
Analyst, Jason Stewart, said, "We are adjusting price targets and ratings on several companies in our mREIT coverage universe. While we remain generally positive on levered mortgage investing based on a few key macro premises, we see sector valuations as generally reflective of the environment. The yield curve is still historically steep and the Fed has committed to keeping short term interest rates well anchored through YE14. Equity and credit considerations continue to be a major factor muting agency prepayments, especially given the near record low level of interest rates. However, the risk of government intervention remains a serious risk factor as it could materially change the prepayment landscape. Mortgage REIT equity valuations have moved considerably higher, though they still remain well below peaks achieved in previous cylcles. Our general preference is to continue to hold companies that have sustainable dividends and trade near peak price to book multiples and buy companies with stable dividends and a more reasonable valuation on a price to book basis."
"We are adjusting our ratings and price targets for several companies in our mortgage REIT coverage universe and we initiated coverage on AG Mortgage Investment Trust (Nasdaq: MITT)(Neutral, $22.50 PT) and Western Asset Mortgage Capital Inc. (NYSE: WMC)(Buy, $21 PT). While we remain generally positive on levered mortgage investing based on a few key macro premises, we see sector valuations as generally reflective of the supportive environment and limiting of further capital appreciation."
Other adjustments include:
American Capital Mortgage (Nasdaq: MTGE) downgraded from Buy to Neutral, price target from $20 to $23.
American Capital Agency (Nasdaq: AGNC), price target raised from $28 to $31.
Apollo Residential (Nasdaq: AMTG), price target raised from $19 to $21.
Capstead Mortgage Asset (NYSE: CMO), price target raised from $13 to $14.
CYS Investments (NYSE: CYS), PT raised from $13.50 to $14.25.
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Analyst, Jason Stewart, said, "We are adjusting price targets and ratings on several companies in our mREIT coverage universe. While we remain generally positive on levered mortgage investing based on a few key macro premises, we see sector valuations as generally reflective of the environment. The yield curve is still historically steep and the Fed has committed to keeping short term interest rates well anchored through YE14. Equity and credit considerations continue to be a major factor muting agency prepayments, especially given the near record low level of interest rates. However, the risk of government intervention remains a serious risk factor as it could materially change the prepayment landscape. Mortgage REIT equity valuations have moved considerably higher, though they still remain well below peaks achieved in previous cylcles. Our general preference is to continue to hold companies that have sustainable dividends and trade near peak price to book multiples and buy companies with stable dividends and a more reasonable valuation on a price to book basis."
"We are adjusting our ratings and price targets for several companies in our mortgage REIT coverage universe and we initiated coverage on AG Mortgage Investment Trust (Nasdaq: MITT)(Neutral, $22.50 PT) and Western Asset Mortgage Capital Inc. (NYSE: WMC)(Buy, $21 PT). While we remain generally positive on levered mortgage investing based on a few key macro premises, we see sector valuations as generally reflective of the supportive environment and limiting of further capital appreciation."
Other adjustments include:
American Capital Mortgage (Nasdaq: MTGE) downgraded from Buy to Neutral, price target from $20 to $23.
American Capital Agency (Nasdaq: AGNC), price target raised from $28 to $31.
Apollo Residential (Nasdaq: AMTG), price target raised from $19 to $21.
Capstead Mortgage Asset (NYSE: CMO), price target raised from $13 to $14.
CYS Investments (NYSE: CYS), PT raised from $13.50 to $14.25.
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