UPDATE: Bank of America Resumes Coverage on Annaly Capital Management with Neutral Rating, $14.75 PT
In a report published Monday, Bank of America resumed coverage on Annaly Capital Management (NYSE: NLY) with a Neutral rating and $14.75 price target.
Bank of America noted, “We are resuming coverage of Annaly Capital (NLY) with a Neutral rating, given its attractive dividend yield and limited upside potential. We believe NLY will likely generate a healthy 10% dividend yield, despite elevated refinance activity serving as an overhang on earnings. Specifically, in the current low rate backdrop, we expect NLY's portfolio returns (ROE) to migrate lower for the foreseeable future, despite diversification into the commercial mortgage sector. More positively, NLY's valuation appears reasonable at 0.90x of Q3'12 stated BV, suggesting to us it should witness share price support near current levels. We think upside will likely be muted by concerns of further earnings erosion and possible BV weakness in a rising rate environment.”
Annaly Capital Management closed on Friday at $14.80.
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