AGNC Investment Q2 net spread income slips on lower asset yields

Overview

• U.S. mortgage REIT's Q2 comprehensive income per share was $0.52, up from prior quarter

• Tangible net book value per share rose 2.4% sequentially to $8.58

• Net spread and dollar roll income per share fell slightly to $0.40

Outlook

• Company expects favorable supply-demand dynamics to support Agency MBS performance near term

Result Drivers

• AGENCY MBS DEMAND-SUPPLY - Elevated mortgage rates reduced projected Agency MBS supply while demand remained strong, supporting tighter spreads and portfolio performance, per CEO Peter Federico

• MACRO VOLATILITY - Geopolitical tensions and supply chain disruptions led to rising Treasury yields and a shift in monetary policy expectations, impacting market conditions, per CEO Peter Federico

• MODEST INCOME DECLINE - Net spread and dollar roll income per share fell $0.02 from prior quarter due to slightly lower asset yields and net interest spread, per CFO Bernice Bell

Company press release: ID:nPn7vrpH5a

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 10 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the specialized reits peer group is "buy."

• Wall Street's median 12-month price target for AGNC Investment Corp is $11.75, about 4.7% above its July 17 closing price of $11.22

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 7 three months ago

Reuters Recommended Reads

• July 20 - Dynex Capital Q2 book value rises as portfolio expands

• July 20 - Peoples Bancorp of North Carolina Q2 net interest income rises

• July 17 - Hingham Institution for Savings Q2 net income more than doubles on higher loan yields, lower funding costs

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)