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On Tuesday, RBC Capital Markets adjusted its outlook on Annaly Capital Management (NYSE:NLY), a leading real estate investment trust with a market capitalization of $11.37 billion. Analyst Kenneth Lee at RBC Capital reduced the price target for Annaly Capital shares to $21.00, down from the previous $22.00, while continuing to endorse the stock with an Outperform rating. According to InvestingPro data, analyst targets for the stock range from $18.00 to $23.00.
The adjustment follows the review of the company’s first quarter performance. Lee expressed a positive view on the company’s future, particularly noting increased visibility and confidence in the company’s common dividend payouts. Management at Annaly Capital has indicated plans to sustain its new 70 cents per share quarterly common dividend throughout 2025. InvestingPro data reveals the company offers a substantial 14.9% dividend yield and has maintained dividend payments for 29 consecutive years. Discover more dividend insights and 8 additional ProTips with an InvestingPro subscription.
RBC Capital’s analysis highlighted Annaly Capital’s diversified capital allocation strategy, which includes a Mortgage Servicing Rights (MSR) portfolio, and the company’s robust liquidity position as key factors supporting the Outperform rating. The slight modification of the price target to $21 reflects a fine-tuning by RBC Capital rather than a significant change in the firm’s outlook on the company. Based on current metrics, InvestingPro’s Fair Value analysis suggests the stock is fairly valued.
Annaly Capital Management specializes in mortgage finance and manages assets on behalf of institutional and individual investors worldwide. The company’s investment strategies typically include mortgage pass-through certificates, collateralized mortgage obligations (CMOs), and other mortgage-backed securities (MBS).
The revised price target suggests that RBC Capital Markets remains optimistic about Annaly Capital Management’s performance and its ability to maintain a stable dividend, which is often a critical factor for investors in real estate investment trusts. The endorsement comes despite a minor adjustment in expectations, as reflected in the updated price target.
In other recent news, Annaly Capital Management Inc reported its first-quarter 2025 earnings, revealing a mixed financial performance. The company’s earnings per share (EPS) came in at $0.72, surpassing the forecasted $0.70. However, Annaly’s revenue of $186.64 million fell significantly short of the anticipated $449.89 million. Despite the revenue miss, the company announced an increase in its dividend from $0.65 to $0.70 per share. The firm’s economic return for the quarter was reported at 3%, although its book value per share experienced a slight decline. Annaly’s portfolio showed resilience, with a noted increase in its agency portfolio, reflecting strong operational capabilities. The company plans to maintain its dividend level throughout 2025, with an eye on potential regulatory reforms that could impact its market strategy. Analyst discussions during the earnings call highlighted concerns about the company’s book value and revenue generation, alongside a positive long-term outlook for the housing market.
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