Compass Point Upgrades AG Mortgage Investment Trust (MITT) to Buy Following Q3
Compass Point upgraded AG Mortgage Investment Trust (NYSE: MITT) from Neutral to Buy with a price target of $25.50 (from $22.50) posts Q3.
The firm comments, "We are upgrading the shares of MITT to Buy from Neutral and raising our price target to $25.50 following 3Q12 earnings. Our new $25.50 price target represents a multiple of 1.07x 3Q12 book value per share and a 12.1% pro forma dividend yield. Overall, 3Q12 earnings were better than expected as net income came in above estimates and book value per share increased more than anticipated. Over the medium term, we remain cautious on levered Agency MBS investors as elevated prepayment levels will lower margins on reinvested capital. However, as long as the Fed remains committed to buying Agency MBS, book values will remain stable. At MITT we expect consistent results from a well-positioned Agency MBS portfolio and significant capital allocation toward credit assets to result in a premium valuation. Many of the concerns we have regarding Agency investing are in fact tailwinds for non-Agency portfolios and we expect hybrid or diversified mREITs to outperform their all Agency MBS peers. In addition, it seems clear to us that is well ahead of peers in identifying and allocating to unique credit assets. If achieved, our price target represents a total return opportunity of 22.6%."
For an analyst ratings summary and ratings history on AG Mortgage Investment Trust click here. For more ratings news on AG Mortgage Investment Trust click here.
Shares of AG Mortgage Investment Trust closed at $23.32 yesterday, with a 52 week range of $16.48-$24.84.
The firm comments, "We are upgrading the shares of MITT to Buy from Neutral and raising our price target to $25.50 following 3Q12 earnings. Our new $25.50 price target represents a multiple of 1.07x 3Q12 book value per share and a 12.1% pro forma dividend yield. Overall, 3Q12 earnings were better than expected as net income came in above estimates and book value per share increased more than anticipated. Over the medium term, we remain cautious on levered Agency MBS investors as elevated prepayment levels will lower margins on reinvested capital. However, as long as the Fed remains committed to buying Agency MBS, book values will remain stable. At MITT we expect consistent results from a well-positioned Agency MBS portfolio and significant capital allocation toward credit assets to result in a premium valuation. Many of the concerns we have regarding Agency investing are in fact tailwinds for non-Agency portfolios and we expect hybrid or diversified mREITs to outperform their all Agency MBS peers. In addition, it seems clear to us that is well ahead of peers in identifying and allocating to unique credit assets. If achieved, our price target represents a total return opportunity of 22.6%."
For an analyst ratings summary and ratings history on AG Mortgage Investment Trust click here. For more ratings news on AG Mortgage Investment Trust click here.
Shares of AG Mortgage Investment Trust closed at $23.32 yesterday, with a 52 week range of $16.48-$24.84.