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Why Is Annaly Capital (NLY) Up 1.5% Since the Last Earnings Report?

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About a month has gone by since the last earnings report for Annaly Capital Management Inc (NLY - Free Report) . Shares have added about 1.5% in that time frame, outperforming the market.

Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Annaly Capital's Q2 Earnings in Line, NII Goes Up

Annaly reported second-quarter 2017 adjusted core earnings of 30 cents per share, in line with the Zacks Consensus Estimate. Earnings, however, compared favorably with the prior-year quarter figure of 29 cents.

Results highlight an increase in the to-be-announced dollar roll income.

Net interest income (NII) in the quarter totaled $315.1 million, reflecting year-over-year growth of 3.5%.

Quarter in Detail

In the reported quarter, average yield on interest-earning assets was 2.58%, while average cost of interest-bearing liabilities (including interest expense on interest rate swaps) was 1.74%.

This led to a net interest rate spread of 0.84% for the quarter, reflecting year-over-year expansion of 4 basis points (bps). Net interest margin came in at 1.23% compared with 1.15% recorded in the year-ago period.

The company’s investment at fair value (including Agency mortgage-backed securities and Agency debentures) was $73.9 billion as of Jun 30, 2017, up from $64.9 billion as of Jun 30, 2016.

Annaly’s book value per share came in at $11.19 as of Jun 30, 2017, compared with $11.23 as of Mar 31, 2017. At the end of the second quarter, the company’s capital ratio (representing the ratio of stockholders’ equity to total assets) was 13.2%, flat year over year.

Leverage was 5.6:1 as of Jun 30, 2017, compared with 5.3:1 as of Jun 30, 2016. The company offered an annualized core return on average equity of 10.54% in the quarter, up from 9.73% in the year-ago period.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

VGM Scores

At this time, Annaly Capital's stock has a nice Growth Score of B, while it is doing a bit better on the momentum front with A.  The stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Based on our scores, the stock is suitable for value and momentum investors than those looking for growth .

Outlook

The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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