UPDATE: Wunderlich Securities Reiterates On Western Asset Mortgage Capital On Lowering Estimates on Flatter Yield Curve

In a report published Friday, Wunderlich Securities analyst Merrill Ross reiterated a Hold rating on

, but lowered the price target from $15.00 to $14.50. In the report, Wunderlich Securities noted, “Hold-rated Western Asset Mortgage Capital Corp. (WMC) reported core plus drop income of $0.67/sh, falling a bit short of expectations. Because taxable earnings exceed GAAP, the BOD increased the dividend. While asset values were little changed, BVPS declined slightly to $15.26, because dividends exceeded earnings. WMC has a strategic plan to reallocate capital out of agency MBS into assets that are more likely to create value in a post-taper housing finance market, but little progress was made during 3Q14 to that end. Maintain Hold; our lower target is a slight discount to trailing BVPS, which we think is a reasonable expectation when market participants believe that monetary policy could become less accommodative.” Western Asset Mortgage Capital closed on Thursday at $14.77.