UPDATE: Deutsche Bank Initiates Buy, $21.75 PT on Western Asset Mortgage Capital on ROE Outlook

Deutsche Bank initiates Western Asset Mortgage Capital

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.