AGNC Investment Q3 net loss widens on Agency MBS market weakness

Overview

• U.S. mortgage REIT's Q3 net loss widened, tangible net book value per share fell 17%

• Company's results impacted by Agency MBS market weakness amid rising rates and volatility

• Company issued $992 mln in common stock via ATM offerings after S&P MidCap 400 Index inclusion

Outlook

• Company expects Agency MBS performance to improve if Treasury market volatility subsides

• AGNC says Agency MBS spreads are near multi-year highs, supporting a constructive outlook

• Company notes supply-demand technicals for Agency MBS remain balanced as mortgage originations stay low

Result Drivers

• AGENCY MBS WEAKNESS - Co said sharp rise in interest rates and increased volatility led to pronounced weakness in Agency MBS, which was the worst performing sector of the Bloomberg U.S. Aggregate Bond Index in Q3

• NET INTEREST SPREAD COMPRESSION - Co reported annualized net interest spread fell to 1.86% from 2.00% in prior qtr, reflecting higher funding costs and lower asset yields

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 11 "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 $10.00, about 14.7% above its October 16 closing price of $8.72

• The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 7 three months ago

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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.)