We are changing our long-term recommendation for American Capital Agency (AGNC) from Neutral to Outperform as we anticipate it to perform well above the broader market.
In the last 30 days, fiscal earnings estimates have been increased by most of the analysts covering the stock, driven by its viable business model and government backing, which limits its credit risk. American Capital is among a selected group of companies who have increased its dividend during the economic crisis.
Over the last five years, American Capital s shares have traded in a range of 4.9X to 7.0X trailing 12-month earnings. Our target price of $35.00, 8.3X 2010 EPS, reflects our Outperform recommendation.
AMER CAP AGENCY (AGNC): Free Stock Analysis Report
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