We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Higher NII & Servicing Income to Support Annaly's Q2 Earnings
Read MoreHide Full Article
Key Takeaways
Annaly's Q2 earnings are estimated to be 75 cents per share, indicating a rise of 2.7% y/y.
NII is projected to be $509 million, suggesting 86.3% growth from the prior-year quarter.
Higher servicing income may support results, while MBS volatility could weigh on book value.
Annaly Capital Management Inc. (NLY - Free Report) is scheduled to report second-quarter 2026 results on July 21, after market close. The company’s net interest income (NII) and earnings are expected to reflect year-over-year increases in the quarter to be reported.
In the last reported quarter, the mortgage real estate investment trust's earnings available for distribution per share surpassed the Zacks Consensus Estimate. The company's net interest income and net interest margin improved year over year. The year-over-year increase in book value per share was also encouraging.
Annaly has an impressive earnings surprise history. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 2.07%.
Annaly Capital Management Inc Price and EPS Surprise
Let us see how things have shaped up before the second-quarter earnings announcement.
The consensus estimate for second-quarter NII is pegged at $509 million, suggesting an 86.3% increase from the year-ago quarter's reported NII.
The Zacks Consensus Estimate for earnings has been revised upward to 75 cents over the past seven days. The estimate indicates a 2.7% increase from the year-ago quarter's actual.
Factors to Shape NLY’s Q2 Performance
The Federal Reserve kept interest rates unchanged in the second quarter of 2026, while noting that economic activity continued to expand at a solid pace despite elevated uncertainty and inflation remaining above its 2% target. Throughout the quarter, mortgage rates remained elevated, averaging in the mid-6% range. While refinance activity witnessed a modest pickup as rates briefly declined during parts of the quarter, purchase volume remained under pressure due to constrained housing inventory and elevated home prices.
Given this backdrop, NLY's mortgage-backed securities (MBS) portfolio is likely to have faced continued interest-rate volatility and fluctuating agency MBS spreads during the quarter. Sharp movements in U.S. Treasury yields amid changing expectations around inflation and Federal Reserve policy likely contributed to volatility in MBS valuations. This might have pressured the company's book value performance in the second quarter of 2026.
Although mortgage rates temporarily eased during parts of the quarter, they generally remained well above the levels of most outstanding mortgages, keeping refinancing incentives relatively subdued. As a result, NLY's constant prepayment rates are expected to have remained relatively contained, helping moderate premium amortization expenses and support NII. Stable prepayments, along with attractive reinvestment opportunities at higher yields, are also likely to have supported average asset yields during the second quarter.
Given manageable prepayment speeds during the second quarter, the company's mortgage servicing rights portfolio is likely to have benefited to some extent. This is anticipated to have increased NLY's servicing fees in the quarter to be reported.
The Zacks Consensus Estimate for net servicing income of $167.7 million indicates a year-over-year rise of 31.9%.
What the Zacks Model Reveals for Annaly
Our proven model predicts an earnings beat for NLY this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is exactly the case here.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Annaly has an Earnings ESP of +0.33%.
Zacks Rank: NLY currently carries a Zacks Rank of 2.
REIT Stocks to Consider
Here are a couple of REIT stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
Quarterly earnings estimates for NETSTREIT have been unchanged at 34 cents per share over the past week.
Agree Realty Corporation (ADC - Free Report) is expected to release second-quarter 2026 earnings on July 30. The company has an Earnings ESP of +0.27% and a Zacks Rank #3 at present.
Quarterly earnings estimates for Agree Realty have been unchanged at $1.13 per share over the past week.
View the Zacks #1 Rank List
Image: Bigstock
Higher NII & Servicing Income to Support Annaly's Q2 Earnings
Key Takeaways
Annaly Capital Management Inc. (NLY - Free Report) is scheduled to report second-quarter 2026 results on July 21, after market close. The company’s net interest income (NII) and earnings are expected to reflect year-over-year increases in the quarter to be reported.
In the last reported quarter, the mortgage real estate investment trust's earnings available for distribution per share surpassed the Zacks Consensus Estimate. The company's net interest income and net interest margin improved year over year. The year-over-year increase in book value per share was also encouraging.
Annaly has an impressive earnings surprise history. The company surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 2.07%.
Annaly Capital Management Inc Price and EPS Surprise
Annaly Capital Management Inc price-eps-surprise | Annaly Capital Management Inc Quote
Let us see how things have shaped up before the second-quarter earnings announcement.
The consensus estimate for second-quarter NII is pegged at $509 million, suggesting an 86.3% increase from the year-ago quarter's reported NII.
The Zacks Consensus Estimate for earnings has been revised upward to 75 cents over the past seven days. The estimate indicates a 2.7% increase from the year-ago quarter's actual.
Factors to Shape NLY’s Q2 Performance
The Federal Reserve kept interest rates unchanged in the second quarter of 2026, while noting that economic activity continued to expand at a solid pace despite elevated uncertainty and inflation remaining above its 2% target. Throughout the quarter, mortgage rates remained elevated, averaging in the mid-6% range. While refinance activity witnessed a modest pickup as rates briefly declined during parts of the quarter, purchase volume remained under pressure due to constrained housing inventory and elevated home prices.
Given this backdrop, NLY's mortgage-backed securities (MBS) portfolio is likely to have faced continued interest-rate volatility and fluctuating agency MBS spreads during the quarter. Sharp movements in U.S. Treasury yields amid changing expectations around inflation and Federal Reserve policy likely contributed to volatility in MBS valuations. This might have pressured the company's book value performance in the second quarter of 2026.
Although mortgage rates temporarily eased during parts of the quarter, they generally remained well above the levels of most outstanding mortgages, keeping refinancing incentives relatively subdued. As a result, NLY's constant prepayment rates are expected to have remained relatively contained, helping moderate premium amortization expenses and support NII. Stable prepayments, along with attractive reinvestment opportunities at higher yields, are also likely to have supported average asset yields during the second quarter.
Given manageable prepayment speeds during the second quarter, the company's mortgage servicing rights portfolio is likely to have benefited to some extent. This is anticipated to have increased NLY's servicing fees in the quarter to be reported.
The Zacks Consensus Estimate for net servicing income of $167.7 million indicates a year-over-year rise of 31.9%.
What the Zacks Model Reveals for Annaly
Our proven model predicts an earnings beat for NLY this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is exactly the case here.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Annaly has an Earnings ESP of +0.33%.
Zacks Rank: NLY currently carries a Zacks Rank of 2.
REIT Stocks to Consider
Here are a couple of REIT stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:
NETSTREIT Corp. (NTST - Free Report) is expected to release second-quarter 2026 earnings on July 22. The company has an Earnings ESP of +1.94 and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Quarterly earnings estimates for NETSTREIT have been unchanged at 34 cents per share over the past week.
Agree Realty Corporation (ADC - Free Report) is expected to release second-quarter 2026 earnings on July 30. The company has an Earnings ESP of +0.27% and a Zacks Rank #3 at present.
Quarterly earnings estimates for Agree Realty have been unchanged at $1.13 per share over the past week.