Eric Hagen, an analyst from BTIG, maintained the Buy rating on AGNC Investment. The associated price target is $10.50.
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Eric Hagen has given his Buy rating due to a combination of factors influencing AGNC Investment’s performance. One key reason is the company’s current net asset value (NAV) estimate of $7.95 per share, which reflects a positive total return for its mortgage-backed securities (MBS) portfolio. The strategic use of swaps for hedging, which has proven more effective than using Treasuries, also contributes to the favorable outlook.
Additionally, the decrease in interest rate volatility, as indicated by the MOVE Index reaching a year-to-date low, has supported the performance of higher-coupon securities. This environment, coupled with the potential for interest rate cuts by the Federal Reserve, suggests a reduced prepayment risk and an opportunity for AGNC to maintain its premium stock valuation. Furthermore, the company’s ability to leverage its portfolio efficiently at a cost-effective rate enhances its financial position, supporting the Buy rating with a price target of $10.50 based on a valuation of approximately 1.20 times book value.