Market Overview

Invesco Beats Estimates, KBW Upgrades To Outperform


In a report published Friday, analysts at Keefe, Bruyette & Woods upgraded Invesco Mortgage Capital Inc (NYSE: IVR) from Market Perform to Outperform. The price target was raised from $17.75 to $18.00. The company reported its core EPS for the quarter ahead of the estimates and the consensus.

The EPS outperformance was driven by marginally lower funding expenses than had been estimated by the analysts. Apart from the EPS and higher than estimated book value growth, the overall results were largely in-line with the estimates. The analysts believe that the trailing four quarter economic return for the company was the highest in the sector.

According to Keefe, Bruyette & Woods, "There are risks in the mREIT space, which is why almost everything in the sector trades at discounts to book. What has tended to earn companies valuation premiums relative peers, however, has been more stable performance, more lower perceived rate risk, and in some cases higher yield."

Invesco is currently one of the most highly discounted hybrid mREITS, according to the analysts. The company's performance has been more or less in line with its peer group average for the last few years.

"We don't expect it to be the sector's top performer in terms of book value stability or economic return, but we expect it will be at least average and likely among the highest in shareholder return if/when the valuation discount vs. peers narrows," the analysts added.

Latest Ratings for IVR

Nov 2020B of A SecuritiesMaintainsUnderperform
Jun 2020B of A SecuritiesInitiates Coverage OnUnderperform
May 2020BarclaysDowngradesEqual-WeightUnderweight

View More Analyst Ratings for IVR
View the Latest Analyst Ratings


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Posted-In: Keefe Bruyette & WoodsAnalyst Color Upgrades Price Target Analyst Ratings

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