On Friday, Jones Trading initiated coverage on shares of AGNC Investment Corp (NASDAQ:AGNC), a real estate investment trust, with a Buy rating and a price target set at $10.75. The firm's analysis anticipates that AGNC will perform well due to expected stability or easing in monetary policy. This environment is projected to enable the company to generate mid- to high-teen returns on equity (ROEs) and/or significant book value appreciation.
The price target suggested by Jones Trading is based on a 1.05 times target price-to-book value per share (P/BVPS) and a 12.5% dividend yield. According to the firm's projections, reaching this price target would correspond to an expected total return of 25% over the next 12 months.
AGNC Investment Corp specializes in investments primarily in residential mortgage-backed securities for which the principal and interest payments are guaranteed by a U.S. government agency or a U.S. government-sponsored entity. The firm's positive outlook for AGNC is tied to the belief that the company is a leading pure-play agency mortgage REIT, which is well-positioned to benefit from the current economic and policy environment.
The analyst's statement highlighted AGNC's status as a premier pure-play agency mortgage REIT, suggesting that the company is poised to outperform its peers. The expected policy stability or easing is seen as a favorable condition for AGNC to thrive and deliver substantial returns to its shareholders.
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