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Why Is Annaly (NLY) Down 4.7% Since Last Earnings Report?
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A month has gone by since the last earnings report for Annaly Capital Management (NLY - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Annaly due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Annaly Capital Management Inc before we dive into how investors and analysts have reacted as of late.
Annaly Q1 Earnings Beat Estimates, Net Interest Margin Improves Y/Y
Annaly reported first-quarter 2026 earnings available for distribution per average share of 76 cents, which beat the Zacks Consensus Estimate of 74 cents. The figure increased from 72 cents in the year-ago quarter.
The company’s net interest income and net interest margin improved year over year in the reported quarter. Notably, the year-over-year increase in book value per common share was also encouraging. However, a lower economic capital ratio was concerning.
Net income available to common stockholders was $242 million compared with $87.1 million in the year-ago period.
Inside Annaly’s Headlines
Net interest income was $452.7 million in the reported quarter, which lagged the Zacks Consensus Estimate by 8.4%. In the prior-year quarter, the company reported NII of $220 million.
Net interest spread (excluding PAA) of 1.42% in the first quarter increased from 1.35% in the prior-year quarter.
Annaly’s BVPS was $19.82 as of March 31, 2026, up from $19.02 in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.7%, down from 14.8% in the prior-year quarter.
In the first quarter, the weighted average actual constant prepayment rate was 10.2%, up from 7.1% in the year-ago quarter.
Annaly generated an annualized EAD return on average equity of 14.58% in the first quarter, which increased from the prior-year quarter’s 14.43%.
Annaly’s total portfolio was $106.7 billion in the quarter, including a $92.2-billion Agency portfolio. The Residential Credit portfolio increased 30% to $10.3 billion, while the MSR portfolio increased 9% to $4.2 billion.
Liquidity
Annaly maintained a disciplined leverage profile in the quarter, with GAAP leverage at 7.3X and economic leverage at 5.7X, both modestly higher than the prior quarter’s levels. The company also reported total stockholders’ equity of $16.3 billion as of the quarter-end.
Liquidity remained a focal point, given ongoing macro and rate volatility. Annaly ended the quarter with $9 billion in total assets available for financing, including $5 billion in cash and unencumbered Agency MBS. This flexibility matters for a mortgage REIT because it helps sustain funding access and supports portfolio repositioning as market conditions shift.
Hedging
Against a volatile rate environment, the company kept its hedge posture relatively steady. The company ended the quarter with a hedge ratio of 87%, while maintaining an $81-billion hedge portfolio that was broadly in line with the prior quarter.
Funding costs improved modestly, supporting underlying spread dynamics. Average economic costs of interest-bearing liabilities were 3.93% in the quarter, while the net interest margin (excluding PAA) was 1.71% compared with 1.69% in the first quarter of 2025. Average yield on interest-earning assets, excluding the premium amortization adjustment, was 5.35%, highlighting how asset yields continued to run ahead of funding costs as the company balanced carry opportunities with risk management.
Dividend Coverage & Capital Raising
A key highlight for income-focused investors was that earnings again exceeded the common dividend. Annaly declared a quarterly common stock cash dividend of 70 cents per share for the first quarter, supported by its earnings available for distribution.
The company also leaned on equity issuance to support growth. Annaly raised $509 million through its at-the-market sales program during the quarter, which management characterized as accretive, and framed the move as part of its broader approach to disciplined portfolio management.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates revision.
VGM Scores
At this time, Annaly has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Annaly has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Annaly (NLY) Down 4.7% Since Last Earnings Report?
A month has gone by since the last earnings report for Annaly Capital Management (NLY - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Annaly due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Annaly Capital Management Inc before we dive into how investors and analysts have reacted as of late.
Annaly Q1 Earnings Beat Estimates, Net Interest Margin Improves Y/Y
Annaly reported first-quarter 2026 earnings available for distribution per average share of 76 cents, which beat the Zacks Consensus Estimate of 74 cents. The figure increased from 72 cents in the year-ago quarter.
The company’s net interest income and net interest margin improved year over year in the reported quarter. Notably, the year-over-year increase in book value per common share was also encouraging. However, a lower economic capital ratio was concerning.
Net income available to common stockholders was $242 million compared with $87.1 million in the year-ago period.
Inside Annaly’s Headlines
Net interest income was $452.7 million in the reported quarter, which lagged the Zacks Consensus Estimate by 8.4%. In the prior-year quarter, the company reported NII of $220 million.
Net interest spread (excluding PAA) of 1.42% in the first quarter increased from 1.35% in the prior-year quarter.
Annaly’s BVPS was $19.82 as of March 31, 2026, up from $19.02 in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.7%, down from 14.8% in the prior-year quarter.
In the first quarter, the weighted average actual constant prepayment rate was 10.2%, up from 7.1% in the year-ago quarter.
Annaly generated an annualized EAD return on average equity of 14.58% in the first quarter, which increased from the prior-year quarter’s 14.43%.
Annaly’s total portfolio was $106.7 billion in the quarter, including a $92.2-billion Agency portfolio. The Residential Credit portfolio increased 30% to $10.3 billion, while the MSR portfolio increased 9% to $4.2 billion.
Liquidity
Annaly maintained a disciplined leverage profile in the quarter, with GAAP leverage at 7.3X and economic leverage at 5.7X, both modestly higher than the prior quarter’s levels. The company also reported total stockholders’ equity of $16.3 billion as of the quarter-end.
Liquidity remained a focal point, given ongoing macro and rate volatility. Annaly ended the quarter with $9 billion in total assets available for financing, including $5 billion in cash and unencumbered Agency MBS. This flexibility matters for a mortgage REIT because it helps sustain funding access and supports portfolio repositioning as market conditions shift.
Hedging
Against a volatile rate environment, the company kept its hedge posture relatively steady. The company ended the quarter with a hedge ratio of 87%, while maintaining an $81-billion hedge portfolio that was broadly in line with the prior quarter.
Funding costs improved modestly, supporting underlying spread dynamics. Average economic costs of interest-bearing liabilities were 3.93% in the quarter, while the net interest margin (excluding PAA) was 1.71% compared with 1.69% in the first quarter of 2025. Average yield on interest-earning assets, excluding the premium amortization adjustment, was 5.35%, highlighting how asset yields continued to run ahead of funding costs as the company balanced carry opportunities with risk management.
Dividend Coverage & Capital Raising
A key highlight for income-focused investors was that earnings again exceeded the common dividend. Annaly declared a quarterly common stock cash dividend of 70 cents per share for the first quarter, supported by its earnings available for distribution.
The company also leaned on equity issuance to support growth. Annaly raised $509 million through its at-the-market sales program during the quarter, which management characterized as accretive, and framed the move as part of its broader approach to disciplined portfolio management.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a upward trend in estimates revision.
VGM Scores
At this time, Annaly has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Annaly has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.