UPDATE: Deutsche Bank Reiterates Buy Rating, Lowers PT on Western Asset Mortgage Capital
In a report published Wednesday, Deutsche Bank reiterated its Buy rating on Western Asset Mortgage Capital (NYSE: WMC), but slightly lowered its price target from $25.00 to $24.00.
Deutsche Bank noted, “Last week, WMC reported strong 3Q results, with EPS beating our estimate by 10c due to higher average leverage and BV increasing 8% seq. to $21.76 per share. Given recent weakness, WMC also authorized a stock repurchase of up to 2.4 million shares. While returns on new investments are lower than in 1H12, we continue to expect WMC to post midteen ROEs. Given our portfolio return estimates and with shares trading below BV, we are reiterating our Buy rating. We are reducing our target to $24 per share.”
Western Asset Mortgage Capital closed on Tuesday at $19.22.
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