A month has gone by since the last earnings report for Annaly Capital Management (NLY). Shares have added about 6.2% in that time frame, outperforming 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 Q4 Earnings Surpass Estimates, Book Value Declines Y/Y

Annaly's fourth-quarter 2024 adjusted earnings available for distribution per average share of 72 cents, which beat the Zacks Consensus Estimate of 67 cents. The figure increased from 68 cents reported in the year-ago quarter.

For 2024, adjusted EAD per share was $2.7, which beat the Zacks Consensus Estimate of $2.66. This compares unfavorably with $2.86 reported in the year-ago quarter.

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

Inside Annaly’s Headlines

Net interest income (NII) was $187.3 million in the reported quarter, which missed the Zacks Consensus Estimate of $242 million. In the prior-year quarter, the company reported a negative $53.6 million in NII.

In 2024, NII was $247.8 million, which missed the Zacks Consensus Estimate of $302.5 million. It reported NII of negative $111.4 million in 2023.

At the fourth-quarter end, Annaly had $103.6 billion of total assets, up 2% from the prior quarter.

In the reported quarter, the average yield on interest-earning assets (excluding premium amortization adjustment or PAA) was 5.26%, up from the prior-year quarter’s 4.64%. The average economic costs of interest-bearing liabilities were 3.79%, up from 3.42% in the year-ago quarter.

Net interest spread (excluding PAA) of 1.47% in the fourth quarter increased from 1.22% in the prior-year quarter. Also, the net interest margin (excluding PAA) was 1.71% compared with 1.58% in the fourth quarter of 2023.

Annaly’s BVPS was $19.15 as of Dec. 31, 2024, down 1.5% from $19.44 reported in the prior-year quarter. At the end of the reported quarter, the company’s economic capital ratio was 14.6%, up from 14% in the prior-year quarter.

In the fourth quarter, the weighted average actual constant prepayment rate was 8.7%, up from 6.3% in the year-ago quarter.

Economic leverage was 5.5X as of Dec. 31, 2024, down from 5.7X sequentially and year over year. 

Annaly generated an annualized EAD return on average equity of 14.27% in the fourth quarter, which increased from the prior-year quarter’s 13.76%.

How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Annaly has a poor Growth Score of F, 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Annaly has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Annaly is part of the Zacks REIT and Equity Trust industry. Over the past month, AGNC Investment (AGNC), a stock from the same industry, has gained 3.4%. The company reported its results for the quarter ended December 2024 more than a month ago.

AGNC Investment reported revenues of $115 million in the last reported quarter, representing a year-over-year change of -542.3%. EPS of $0.37 for the same period compares with $0.60 a year ago.

For the current quarter, AGNC Investment is expected to post earnings of $0.40 per share, indicating a change of -31% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.1% over the last 30 days.

AGNC Investment has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

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This article originally published on Zacks Investment Research (zacks.com).

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