Donald Fandetti, an analyst from Wells Fargo, reiterated the Buy rating on Angel Oak Mortgage (AOMR – Research Report). The associated price target is $11.00.
Donald Fandetti’s rating is based on a combination of factors including the positive outlook for Angel Oak Mortgage’s non-QM residential mortgage investments. Despite a decrease in GAAP book value due to spread widening, the company has shown resilience with a recovery in the first quarter of 2025. The management’s expectation of continued growth in net interest income throughout the year supports the current dividend, which remains attractive to investors.
Furthermore, the company’s distributable earnings per share exceeded expectations, indicating strong operational performance. Although there are some uncertainties related to interest rates, the long-term fundamentals for non-QM mortgages are promising, especially with potential changes in GSE involvement. The stock’s valuation, trading below book value, combined with a high dividend yield, makes it an appealing investment opportunity, justifying the Buy rating.
In another report released yesterday, BTIG also maintained a Buy rating on the stock with a $13.50 price target.
AOMR’s price has also changed moderately for the past six months – from $10.990 to $9.810, which is a -10.74% drop .