AGNC Beats Q4 Expectations On Robust Realized Gains

Analysts at Jefferies & Co maintain their "hold" rating on American Capital Agency (NASDAQ: AGNC), while raising their estimates for the company. The target price for AGNC has been raised from $26 to $27.

American Capital Agency reported its Q4 results significantly ahead of the estimates and the consensus, driven by benefits of a steep yield curve and a strong bid for Agency MBS. “At 2.63%, AGNC's net interest spread was 17 bps ahead of our forecast and only down five bps Q/Q,” the analysts say.

“While management does not anticipate a meaningful change to leverage over the near term, a lack of a hard constraint puts AGNC on par with most of their peers,” the analysts add. Jefferies & Co has raised its EPS estimate for FY10 from $4.43 to $4.69.

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