Compass Point Upgrades Annaly Capital Management (NLY) to Buy; Improved Outlook

Compass Point upgraded Annaly Capital Management (NYSE: NLY) from Neutral to Buy with a price target of $17.00.

Analyst, Jason Stewart, said, "Three things have led us to change our opinion on the shares of NLY. First, forward rate expectations moved higher in 2013 after data supporting stronger economic growth was reported in 1Q12. We were looking for the Fed re-committ to ZIRP through 2014 after incorporating this data into their projections, which the FOMC minutes provided last Tuesday. Second, confirmation that the quick start to HARP 2.0 was just that and prepays would not continue higher on the same trajectory as in February (March prepays released after the close last Thursday confirmed this). Third, the valuation works as NLY shares trade at 0.97x BVPS and a 14.1% current dividend yield, both low relative to historical trading multiples (especially given the steep curve and rate outlook)."

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 $15.58 yesterday.

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