Citigroup Lowers Price Target for Annaly Capital (NLY)

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Citigroup has lowered its price target for real estate investment trust, Annaly Capital Management, Inc.( NLY ) Wednesday.

The firm has reaffirmed its rating of "Neutral" for the company, and has lowered its price target from $17 to $15. This price target suggests a slight decrease from the stock's current price of $15.05.

An analyst from the firm commented, "we rate the shares of NLY Neutral with a $15 target price. NLY owns a $130 billion high quality portfolio of Fannie/Freddie Mac mortgage-backed securities financed with short-term repurchase debt. In response to the economic recession, the Fed reduced their target rate to 0% on December 16, 2008 and rates have remained there since then. We believe NLY will generate a solid relative yield though we see downside to the dividend. We also acknowledge elevated prepayment risk and tighter reinvestment spreads. And gain on sale is a greater portion of earnings. We don't see much upside to the stock beyond the dividend. Longer term, the key risk for NLY is if the Fed raises short-term rates."

Annaly Capital shares were down 17 cents, or -1.11% during premarket trading Wednesday. The stock is down -4.01% YTD.

The Bottom Line
Shares of Annaly Capital ( NLY ) have a 13.05% dividend yield, based on last night's closing stock price of $15.32. The stock has technical support in the $14 price area. If the shares can firm up, we see overhead resistance around the $16.00-$16.50 price levels.

Annaly Capital Management, Inc.( NLY ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 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 The NASDAQ OMX Group, Inc.

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