AGNC Investment Corp. (AGNC, Financial) has announced the establishment of separate sales agreements involving a consortium of major financial institutions, including Goldman Sachs, Barclays Capital, BTIG, and others. The agreements pertain to a new offering of common stock, potentially raising an aggregate of up to $1.5 billion.
This initiative allows AGNC to offer and sell its common stock shares periodically through designated sales agents. The transaction will be conducted under the company’s existing automatic shelf registration statement, facilitating the issuance of new shares.
Key participants in this stock offering include prominent financial entities such as Citadel Securities Institutional, Citizens JMP Securities, J.P. Morgan, Keefe, Bruyette, Moelis, Morgan Stanley, RBC Capital, UBS Securities, Virtu Americas, and Wells Fargo. Through these arrangements, AGNC aims to enhance its financial standing and operational capabilities.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for AGNC Investment Corp (AGNC, Financial) is $9.63 with a high estimate of $11.00 and a low estimate of $8.50. The average target implies an upside of 10.40% from the current price of $8.72. More detailed estimate data can be found on the AGNC Investment Corp (AGNC) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, AGNC Investment Corp's (AGNC, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
AGNC Key Business Developments
Release Date: April 22, 2025
- Economic Return: 2.4% in the first quarter.
- Total Stock Return with Dividends Reinvested: Positive 7.8% for the quarter.
- Total Comprehensive Income: $0.12 per common share.
- Dividends Declared: $0.36 per common share.
- Tangible Net Book Value Decline: $0.16 per share.
- Quarter End Leverage: 7.5 times tangible equity.
- Average Leverage: 7.3 times for Q1.
- Liquidity Position: $6 billion in cash and unencumbered Agency MBS, 63% of tangible equity.
- Common Equity Raised: $509 million through at-the-market offering program.
- Net Spread and Dollar Roll Income: Increased $0.07 to $0.44 per common share.
- Net Interest Rate Spread: Rose 21 basis points to 2.12%.
- Average Projected Life CPR: Increased to 8.3% at quarter end.
- Actual CPRs: Averaged 7% for the quarter.
- Asset Portfolio: Totaled $79 billion at quarter end, up $5 billion from the prior quarter.
- Hedge Portfolio Notional Balance: Increased to $64 billion at quarter end.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AGNC Investment Corp (AGNC, Financial) generated an economic return of 2.4% in the first quarter, driven by an attractive monthly dividend.
- The company's total stock return with dividends reinvested was a positive 7.8% for the quarter.
- AGNC maintained a strong liquidity position with $6 billion in cash and unencumbered Agency MBS, representing 63% of tangible equity.
- Net spread and dollar roll income increased to $0.44 per common share, driven by a higher net interest rate spread and larger asset base.
- AGNC's outlook for Agency MBS remains positive, with expectations of regulatory relief potentially increasing demand from banks.
Negative Points
- AGNC's net asset value was negatively impacted by mortgage spread widening, resulting in a $0.16 decline in tangible net book value per share.
- Interest rate volatility and macroeconomic uncertainty caused financial market correlations to break down, affecting liquidity and investor sentiment.
- The current coupon spread to a blend of swap rates reached an intraday peak of 230 basis points, indicating significant pressure on the Agency MBS market.
- Quarter-end leverage increased to 7.5 times tangible equity, up from 7.2 times at year-end, due to the decline in tangible net book value per share.
- The average projected life CPR in AGNC's portfolio increased to 8.3% at quarter end, indicating a rise in prepayment risk.
