UPDATE: Credit Suisse Initiates Coverage on Ellington Residential Mortgage REIT with Neutral Rating, $20 PT on Agency Focus, Active Management

In a report published Tuesday, Credit Suisse analyst Douglas Harter initiated coverage on

with a Neutral rating and $20.00 price target. In the report, Credit Suisse noted, “We are initiating on Ellington Residential Mortgage REIT (EARN) with a Neutral rating and a $20 target price. We see 11% of total return potential over the next year coming largely from the 10% expected dividend yield. EARN will be primarily focused on the Agency MBS market but will have the flexibility to deploy about 15-20% of its capital toward non-Agency MBS. We expect EARN actively to manage its portfolio in order to maximize total economic returns, similar to the managers' track record with EFC. Similar to EFC, we expect EARN's portfolio to be actively managed as the manager looks to continually find the best relative value with the Agency MBS sector. In the current volatile landscape we see this as more important than before.” Ellington Residential Mortgage REIT closed on Friday at $19.41.