A month has gone by since the last earnings report for Annaly Capital Management (NLY Quick QuoteNLY - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Annaly 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 Q2 Earnings Surpass Estimates

Annaly reported second-quarter earnings available for distribution (EAD) per average share of 68 cents, surpassing the Zacks Consensus Estimate of 66 cents. However, the figure declined from the 72 cents reported in the year-ago quarter.

NLY’s average yield on interest-earning assets improved in the reported quarter. However, the company recorded a year-over-year decline in book value per share (BVPS) and the net interest margin.

Inside the Headlines

Net interest income (NII) was $53.6 million in the reported quarter. The Zacks Consensus Estimate was pegged at $318 million. The company reported a negative $31.9 million in NII in the prior-year quarter.

At the second-quarter end, Annaly had $93.67 billion of total assets, up 2.4% from the prior quarter.

In the reported quarter, the average yield on interest-earning assets (excluding premium amortization adjustment or PAA) was 5.14%, up from the prior-year quarter’s 4.22%. The average economic costs of interest-bearing liabilities were 3.9%, up from 2.77% in the prior-year quarter.

Net interest spread (excluding PAA) of 1.24% in the second quarter fell from 1.45% in the prior-year quarter. Also, the net interest margin (excluding PAA) was 1.58% compared with 1.66% in second-quarter 2023.

Annaly’s BVPS was $19.25 as of Jun 30, 2024, down 7.1% from $20.73 reported in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.2%, down from 14.3% in the prior-year quarter.

In the second quarter, the weighted average actual constant prepayment rate was 7.4%, up from 7% in the year-ago quarter.

Economic leverage was 5.8X as of Jun 30, 2024, up from 5.6X sequentially and unchanged year over year. Annaly generated an annualized EAD return on average equity of 13.36% in the second quarter, which increased from the prior-year quarter’s 13.22%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

At this time, Annaly has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Annaly has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Annaly belongs to the Zacks REIT and Equity Trust industry. Another stock from the same industry, AGNC Investment (AGNC Quick QuoteAGNC - Free Report) , has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.

AGNC Investment reported revenues of $-3 million in the last reported quarter, representing a year-over-year change of -95.7%. EPS of $0.53 for the same period compares with $0.67 a year ago.

AGNC Investment is expected to post earnings of $0.50 per share for the current quarter, representing a year-over-year change of -23.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for AGNC Investment. Also, the stock has a VGM Score of F.