UPDATE: Stifel Nicolaus Raises PT to $35 on American Capital Agency on Book Value Gains

Stifel Nicolaus reiterated its Buy rating on American Capital Agency

and increased its price target from $34.50 to $35. Stifel Nicolaus commented, "With a 15.8% dividend yield, trading slightly below book, and holding one of the most prepayment protected portfolios in the group we remain positive on AGNC. That said we are cautious on the group and see little near-term relief from the key issues of rising prepayment speeds and interest spread compression. We also see the challenges of adding to book value through adept trading and above-book capital raising as increasingly limited, leaving AGNC in a position where maintaining the dividend may require paying out book value." American Capital Agency closed at $31.70 on Tuesday.