Wells Fargo Initiating Coverage On Invesco Mortgage Capital Inc.(IVR)

Wells Fargo is out with a research report on Invesco Mortgage Capital Inc.

and is initiating coverage with a Outperform rating and a $21-$23 price target on shares. In a note to clients, Wells Fargo writes, "We are initiating coverage of Invesco Mortgage Capital Inc. (

) with an Outperform rating and a valuation range of $21-23. We see total return potential of 20-25% over the next 12-18 months in IVR and like the company's diversified business model. IVR invests in agency MBS, non-agency MBS, CMBS and PPIP. We are establishing 2011 and 2012 EPS estimates of $4.04 and $4.00, respectively. Our $21-23 valuation range is derived by assigning a 1.0-1.1x price/book multiple on IVRs most recently reported NAV of $21.21. We see total return potential of 20-25% over the next 12-18 months in IVR shares." Shares of IVR closed at $20.77 yesterday.