Barclays Maintains an 'Overweight' on Chimera Investment Corp (CIM); Earnings Will Be Noisy, but the Bonds Remain the Same
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Price: $11.54 -0.35%
Rating Summary:
2 Buy, 11 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
2 Buy, 11 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays maintains an 'Overweight' on Chimera Investment Corp (NYSE: CIM) price target of $3.00.
Barclays analyst says, "While the accounting changes have decreased visibility on core results and increased the volatility of GAAP results, we are incrementally positive on reinvestment opportunities. We expect forced selling from European financials, potential carve outs of credit risk from the GSEs, and a modest increase in jumbo securitizations to increase the supply of non-Agency bonds in 2012, which should alleviate margin pressure at CIM as high yielding assets pay down. We are revising our 2011 EPS estimates to $0.49 from $0.55 and our 2012 estimate to $0.48 from $0.49, and forecast a quarterly dividend of $0.12 for 2012. Because of the reduced
accounting visibility and increased GAAP volatility, we expect the shares could
continue to trade at a discount to peers, so we are reducing our price target to $3 (0.9x current book), but with the stock trading at roughly 0.8x book and a 20% dividend yield, we continue to see the potential for an attractive total return at current levels."
For an analyst ratings summary and ratings history on Chimera Investment Corp click here. For more ratings news on Chimera Investment Corp click here.
Shares of Chimera Investment Corp closed at $2.63 yesterday.
Barclays analyst says, "While the accounting changes have decreased visibility on core results and increased the volatility of GAAP results, we are incrementally positive on reinvestment opportunities. We expect forced selling from European financials, potential carve outs of credit risk from the GSEs, and a modest increase in jumbo securitizations to increase the supply of non-Agency bonds in 2012, which should alleviate margin pressure at CIM as high yielding assets pay down. We are revising our 2011 EPS estimates to $0.49 from $0.55 and our 2012 estimate to $0.48 from $0.49, and forecast a quarterly dividend of $0.12 for 2012. Because of the reduced
accounting visibility and increased GAAP volatility, we expect the shares could
continue to trade at a discount to peers, so we are reducing our price target to $3 (0.9x current book), but with the stock trading at roughly 0.8x book and a 20% dividend yield, we continue to see the potential for an attractive total return at current levels."
For an analyst ratings summary and ratings history on Chimera Investment Corp click here. For more ratings news on Chimera Investment Corp click here.
Shares of Chimera Investment Corp closed at $2.63 yesterday.
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