Analysts' takes on Annaly results


Reiterating Market Perform ratings, FBR and JMP Securities say Annaly (NLY +2%) can thank significantly lower prepayment speeds (CPR dropped to 7% from 13%). Premium amortization dropped to just $30.7M from $201.9M in Q3, says JMP's Steve Delaney, but he estimates as much as $50M of that (about a nickel per share) was a one-time "catchup" adjustment which would lower core EPS to just $0.28 - still above Street estimates.

FBR also notes the one-off nature of the benefit, but says other mREITs reported similar numbers and were rewarded, so why not Annaly.

Overall impressed with the Q, Nomura notes the book value decline of 4.5% was smaller than American Capital at 5.3% and CYS Investments at 8.5% (this was influenced by Annaly's conservative stance, meaning it may be lagging in the big book value bounce-back thus far this year).

Credit Suisse boosts its 2014 core EPS estimate to $1.25 from $1.07 and 2015 to $1.25 from $1.12. ”Given our new earnings estimates we expect that Annaly’s dividend should be stable in the coming quarters."

Previous coverage of Annaly results

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Comments (4)
  • epeon
    , contributor
    Comments (553) | Send Message
     
    I was pretty pleased with NLY's reports. When you are getting 10% + dividends, a report with a slight increase in earnings (enough to cover the divy) is pretty good. So, I continue to hold.
    26 Feb 2014, 02:43 PM Reply Like
  • atk
    , contributor
    Comments (274) | Send Message
     
    Excellent news. Nice to see NLY back over 11.
    26 Feb 2014, 09:41 PM Reply Like
  • Capt Jack Daniels
    , contributor
    Comments (1466) | Send Message
     
    Yeah its nice unless you own NLY at or near 17.

     

    Then you are under water by about 35%.
    26 Feb 2014, 10:55 PM Reply Like
  • Jimster64
    , contributor
    Comments (10) | Send Message
     
    I was fortunate to buy under $10 ..in for the long haul mixed with select dividend stocks.
    No one is a fortune teller so I have to do the best I can and keep my fingers crossed.
    Never know what to believe..new fed chair woman sees a good times ahead ..but then I read the gloom and doom articles that calls for another Great Depression . What's an investor to do?
    27 Feb 2014, 07:23 AM Reply Like
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