MFA Updates Its Portfolio
Analysts at FBR Capital Markets maintain their "outperform" rating on MFA Financial Inc (NYSE: MFA). The target price for MFA has been reduced from $9.50 to $9.00.
MFA Financial recently reported an increase in equity invested in its non-agency portfolio to roughly 50% of its total equity, or $1 billion. “We are lowering our 4Q09 and FY10 earnings expectations to account for MFA's increased exposure to this lower ROE asset class, compared with levered agency paper,” the analysts say.
“We continue to recommend MFA shares, which currently yield nearly 15% and trade at last reported book value… We believe that MFA shares are undervalued based on the company's sum of the parts, the value of MFA's agency portfolio combined with the MFResidential portfolio,” FBR Capital Markets adds.
