AGNC Investment Corp. AGNC is slated to report first-quarter 2025 earnings on April 21, after market close. 

AGNC's peer Annaly Capital Management NLY is scheduled to announce quarterly numbers on April 30, while Arbor Realty Trust ABR is expected to come out with its performance details on May 2.

AGNC Investment’s fourth-quarter 2024 results reflected an improvement in average asset yield on its portfolio, while its tangible book value was down from the prior-year quarter.

The company’s earnings outpaced the Zacks Consensus Estimate in one of the trailing four quarters, missed twice and matched once, the negative surprise being 4.21%, on average.

Earnings Surprise History

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Let us check out how AGNC is expected to fare in terms of revenues and earnings this time around. 

In the past seven days, the consensus estimate for earnings has been unchanged at 40 cents. This suggests a 31% decline from the prior-year quarter. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The Zacks Consensus Estimate for revenues is pegged at $155.4 million, whereas AGNC Investment reported negative revenues of $30 million in the year-ago quarter.

Trends Leading to AGNC’s Q1 Performance

In the first quarter, the Federal Reserve kept interest rates unchanged at 4.25-4.5%. As such, mortgage rates in the first quarter of 2025 were range-bound and hovered near the 7% mark. As such, refinancing activities and origination volumes did not witness significant growth. 

Amid this, a large part of AGNC Investment’s mortgage-backed securities (MBS) holdings is anticipated to have witnessed lower levels of constant prepayment rates. 

This is expected to have negatively impacted net premium amortization in the first quarter, in turn, affecting growth in interest income and average asset yield. The Zacks Consensus for interest income is pegged at $831.3 million, suggesting a decline of 29.5% from the year-ago reported figure.

Given relatively high mortgage rates, AGNC is expected to have a negative impact on net interest income. Higher volatility in the fixed-income markets is likely to have increased asset impairment risks and hedging mismatches for AGNC Investment in the quarter under review. 

Nonetheless, a positively sloped yield curve is expected to have supported mortgage REIT’s valuations. With this, agency mortgage REITs are likely to have witnessed a tangible book value increase as spreads on benchmark indices have tightened during the quarter. This is likely to have increased AGNC’s book value per share in the quarter to be reported.

What Our Model Unveils for AGNC Investment

Our proven model does not conclusively predict an earnings beat for AGNC this time around. 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. This is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

AGNC Investment has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

AGNC’s Price Performance & Valuation

AGNC Investment outperformed the industry in the first quarter of 2025. Its peer, Annaly Capital Management, outperformed the industry, while Arbor Realty Trust underperformed in the same time frame.

Price Performance

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Let us look at the value AGNC offers investors at present.

Currently, the AGNC stock is trading at 0.97X forward 12 months price/tangible book TTM (P/TB TTM), above its median level of 1.00X and the industry’s P/TB TTM multiple of 0.85X. The company’s valuation looks somewhat expensive compared with the industry average and its range.

Price-toTangible Book TTM

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Annaly Capital Management and Arbor Realty Trust are trading at forward P/TB TTM multiples of 0.91X and 0.90X, respectively.

How to Play AGNC Investment’s Stock Now?

AGNC is well-positioned to benefit as it adheres to an active portfolio-management policy, which includes re-evaluation and adjustment of its portfolio and hedges amid a varying interest rate and mortgage market environment. The company focuses on leveraged investments in Agency residential MBS. That includes residential mortgage pass-through securities and collateralized mortgage obligations. The GSE guarantee for the principal and interest payments makes Agency MBS a safer investment choice. 

Market participants are expecting three rates by December 2025, which should help boost AGNC's net interest spread and the book value of its portfolio. This will provide the company’s stock a much-needed boost.

AGNC Investment rewards its shareholders handsomely. AGNC’s current dividend yield is 17.12%. This is impressive compared with the industry’s average of 13.6% and attracts investors as it represents a steady income stream.

However, volatility in the mortgage market, unfavorable changes in the form of the yield curve and a deterioration of the generic financial conditions are likely to affect AGNC's performance. The company also has a track of lowering dividends during stressful times. Potential geopolitical tensions and shifts in fiscal strategies may impact market stability. This, in turn, can affect the performance and attractiveness of Agency MBS.

Investors should remain watchful of these factors, as they can affect the performance of AGNC investment. Hence, prospective investors should analyze the company’s upcoming earnings release and market volatility closely before making an investment decision. Its premiuim valuation also warrant a caution.

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AGNC Investment Corp. (AGNC) : Free Stock Analysis Report

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

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