UPDATE: Jefferies Raises Target to $32 on American Capital

Jefferies reiterates its Buy rating on American Capital (NASDAQ: AGNC) and raises its price target by $2 to $32 a share as it views the company to be a best buy in the mortgage space.

Jefferies says, "AGNC remains well positioned for the current environment, as we anticipate flattish yields for FY'12 to be offset by increasing leverage as CPRs for AGNC's higher fixed coupon, longer duration portfolio remain well contained."

AGNC closed at $29.74 a share on Tuesday.