UPDATE: Credit Suisse Credit Suisse Intiates Coverage on Armour Residential REIT with Outperform Rating, $7.50 PT

In a report published Monday, Credit Suisse initiated coverage on Armour Residential REIT

with an Outperform rating and $7.50 price target. Credit Suisse noted, “We are initiating coverage of Armour Residential REIT with an Outperform rating and a $7.50 target price. We see 22% total return potential over the next 12 months, coming largely from the dividend, but also modest capital appreciation. We expect Armour to deliver the highest ROE (14.7% versus 12.5% on average) in the sector in 2013. While Armour does have the higher leverage, which is a contributor to the higher ROE, the company still delivers ROAs at the top end of the Agency-only peer group.” Armour Residential REIT closed on Friday at $7.04.