Annaly Capital Slashed to “Underperform” at Wells Fargo; Sees Several Headwinds (NLY)


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Mortgage-based REIT Annaly Capital Management, Inc. ( NLY ) on Monday caught a big downgrade from analysts at Wells Fargo.

The firm cut its rating from "Market Perform" to "Underperform" and reduced its price target range from $16-$17 to $15.50-$16.50.

A Wells Fargo analyst commented, "Even though NLY is considered the bellweather in the Agency REIT sector due to (1) having the strongest track record and (2) expertise across a broad range of markets, we remain concerned around NIM compression, higher prepayments and premium valuation to other agency REITs…We are lowering our 2012 and 2013 'core' earnings estimates to $1.91 and $2.05 from $2.15 and $2.18 respectively."

Annaly Capital shares fell 17 cents, or -1%, in premarket trading Monday.

The Bottom Line
Shares of Annaly Capital ( NLY ) have a 12.61% dividend yield, based on Friday's closing stock price of $17.44. The stock has technical support in the $15.50-$16.00 price area. If the shares can firm up, we see overhead resistance around the $18.00-$18.50 price levels.

Annaly Capital Management, Inc. ( NLY ) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing , Stocks

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