UPDATE: Citigroup Raises PT on American Capital Agency Following 2Q Results

In a report published Wednesday, Citigroup analyst Donald Fandetti reiterated a Neutral rating on American Capital Agency AGNC, and raised the price target from $20.00 to $22.00.

In the report, Citigroup noted, “Including a $0.14 benefit due to catch-up premium amortization and $0.49 of estimated earnings from their TBA portfolio, core income was $1.15. AGNC reported GAAP EPS of $4.61, which contained a large hedge gain. Core “spread” income, which excludes realized / unrealized gains and losses on agency MBS and derivatives, was $0.66 per share, down from $0.78 last qtr. AGNC paid a dividend of $1.05, equal to an annualized yield of 18.2% on the current share price. Undistributed taxable income of $1.07 is down slightly from $1.08 last qtr. Book value was down -11.8% q/q to $25.51 from $28.93, as their MBS portfolio underperformed hedges and market rates increased. AGNC bought back 300k shares during the qtr.”

American Capital Agency closed on Tuesday at $23.09.