Street Calls of the Week
Investing.com - BofA Securities raised its price target on AGNC Investment Corp (NASDAQ:AGNC) to $10.00 from $9.25 while maintaining a Neutral rating on the stock. The company, currently trading at $10.13 with a market capitalization of $10.9 billion, offers an impressive 14.4% dividend yield, according to InvestingPro data.
AGNC reported third-quarter core earnings per share of $0.35, falling below the consensus forecast of $0.39 and BofA’s estimate of $0.38, with the variance attributed to lower spread income. Despite the earnings miss, InvestingPro analysis shows the company maintains a GOOD financial health score, with particularly strong momentum metrics.
The company’s spread income declined to 1.78% from 2.01% in the previous quarter due to the maturity of legacy swaps and the timing of capital deployment, according to BofA Securities analyst Derek Hewett.
AGNC noted there will be a modest tailwind of approximately $0.05 quarterly benefit to spread income over time as the Federal Reserve eases monetary policy, despite current spread tightening.
The investment outlook for Agency mortgage-backed securities remains attractive with AGNC indicating the levered return on equity on new investments is approximately 17%, suggesting dividend stability in the current environment.
In other recent news, AGNC Investment Corp. announced its third-quarter earnings for 2025, presenting a mixed financial outcome. The company reported earnings per share (EPS) of $0.35, which did not meet the expected $0.39, missing the target by 10.26%. On the revenue front, AGNC exceeded forecasts by generating $903 million, surpassing the anticipated $883.28 million, resulting in a 2.23% surprise. These developments reflect the company’s recent financial performance, highlighting both challenges and achievements. While no merger activity has been reported, the earnings results are crucial for investors evaluating AGNC’s current position. Analyst firms have not recently upgraded or downgraded the stock, indicating a stable outlook from market observers. This financial update provides investors with important insights into AGNC’s ongoing business operations.
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