UPDATE: Deutsche Bank Initiates Buy, $21.75 PT on Western Asset Mortgage Capital on ROE Outlook
Deutsche Bank initiates Western Asset Mortgage Capital (NYSE: WMC) with a Buy rating and a price target of $21.75.
Deutsche Bank comments, "We expect WMC to generate net ROEs of 14-15% given current spreads available in agency MBS, as the portfolio benefits from the investments in less prepayment-sensitive securities and the low financing cost environment. We believe WMC deployed the new capital quickly and has benefited from rate changes since the offering. We are initiating coverage with a Buy rating and a target of $21.75 per share, which is based on a 10% premium to book value."
WMC closed at $18.52 on Friday.
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