In a report published Monday, Compass Point analyst Jason Stewart initiated coverage on Dynex Capital DX with a Buy rating and $9.50 price target.
In the report, Compass Point noted, “DX is an internally managed mortgage REIT invested in a diversified portfolio of short duration high quality assets. With 59% of equity capital allocated to CMBS, DX's investment portfolio is unique in the mortgage REIT universe. Historically a conservative investor that operates with lower leverage and limited credit risk, the company delivered a steady quarterly total return to shareholders up until 2Q13. In 2Q13, spread widening and severe interest rate volatility reduced BVPS by $1.36 (-13.2% QoQ) to $8.94. We expect the QoQ decline in BVPS attributable to the widening of credit spreads to ultimately be recovered ($1.06 per share) and believe recent market volatility has created an opportunity for investors. With shares trading at 96% of current estimated BVPS, DX represents an uncommon value for a mortgage REIT that should perform consistently across interest rate cycles. If achieved, our $9.50 price target represents a total return of 27%.”
Dynex Capital closed on Friday at $8.43.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in