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Investing.com - JMP Securities has reiterated its Market Outperform rating on MFA Financial Inc . (NYSE:MFA) with a price target of $11.00, representing 0.81 times the company’s current estimated book value. Trading at $9.19 with a price-to-book ratio of 0.51, InvestingPro analysis suggests the stock is currently fairly valued, with additional ProTips available for subscribers regarding the company’s financial strength and market position.
The reaffirmation comes ahead of MFA Financial’s second-quarter 2025 earnings report scheduled for release on Wednesday. JMP analyst Steven DeLaney described MFA as "one of the best current value stories in the residential mortgage credit REIT space." With a market capitalization of $943 million and a beta of 1.7, MFA Financial has maintained a GOOD financial health score according to InvestingPro’s comprehensive analysis, available in the Pro Research Report.
MFA Financial reported first-quarter 2025 distributable earnings per share of $0.29 on May 6, which fell below the $0.39 reported in the fourth quarter of 2024 and was $0.07 less than the current quarterly dividend of $0.36. The result also missed both JMP’s estimate and the Street consensus of $0.32. Notably, the company maintains an impressive 15.67% dividend yield and has consistently paid dividends for 28 consecutive years, according to InvestingPro data.
The company’s economic book value decreased to $13.84 per share, down 0.6% from $13.93 at the end of December 2024. This book value performance, combined with the dividend paid, contributed to a total economic return of 1.9% for the quarter, slightly below the Hybrid Mortgage REIT peer median of 2.2%.
JMP attributed the sequential decline in distributable earnings primarily to the expiration of approximately $1.0 billion notional of low-paying interest rate swaps during the fourth quarter of 2024 and first quarter of 2025, along with a drop in Lima One mortgage banking income and higher credit-related charges from nonperforming asset resolutions.
In other recent news, MFA Financial Inc. reported mixed results for its Q1 2025 earnings. The company posted earnings per share (EPS) of $0.29, which fell short of the anticipated $0.35. However, MFA Financial exceeded revenue expectations with $81.9 million, above the forecasted $70.3 million. In terms of analyst actions, JMP Securities lowered its price target for MFA Financial from $12.00 to $11.00, maintaining a Market Outperform rating. The new price target corresponds to 0.81 times the current estimated book value. Additionally, Jones Trading initiated coverage on MFA Financial with a Hold rating. The firm noted the company’s experienced management and a diversified portfolio that includes various mortgage-credit related investments. These developments indicate a focus on MFA Financial’s financial performance and strategic positioning in the market.
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