What’s in the Playing cards for AGNC Investment’s (AGNC) Q3 Earnings?

AGNC Investment decision Corp. AGNC is scheduled to report its third-quarter 2023 effects on Oct 30, 2023, following the closing bell. The company’s outcomes are anticipated to mirror a 12 months-more than-calendar year decrease in earnings, whilst the prime line is probably to rise.

This Bethesda, MD-dependent mortgage true estate expense have confidence in (mREIT) posted a second-quarter 2023 internet spread and dollar roll revenue for every common share (excluding estimated “capture-up” premium amortization expenditures) of 67 cents conquer the Zacks Consensus Estimate of 58 cents. Altered web fascination and dollar roll money (excluding believed “catch-up” high quality amortization charges) of $493 million remained flat with the quarter-in the past reported amount.

Around the trailing four quarters, the corporation surpassed the Zacks Consensus Estimate on all occasions. It has an earnings surprise of 14.8%, on normal, for the said interval. The graph below depicts the surprise heritage:

AGNC Expense Corp. Cost and EPS Shock


AGNC Investment Corp. Price and EPS Surprise

AGNC Expenditure Corp. rate-eps-shock | AGNC Expense Corp. Quotation

Let us see how things have shaped up prior to the third-quarter earningsannouncement.

Mortgage loan premiums continued to boost in the 3rd quarter, with the rate on a 30-calendar year set property finance loan achieving 7.31% in September, the highest degree in virtually 23 several years. The climb in mortgage loan rates, which saved residence purchasers on the sidelines, led to a smaller origination sector, the two order and refinancing, than the prior-calendar year quarter.

Nevertheless, lower concentrations of refinancing are expected to have lowered prepayment pace and alleviated stress from AGNC’s MBS holdings. This is envisioned to have reduced net premium amortization in the 3rd quarter, offering scope for expansion in interest revenue and normal asset generate. Also, we expect an desire earnings of $478.5 million, suggesting a 28.3% year-above-year rise.

Federal Reserve raised curiosity fees by a different 25 basis factors in the quarter under critique. Hence, the policy charge reached 5-5.25% in July 2023, marking the 11th time FOMC has hiked interest charges in a tightening process that began in March 2022. In September, the fee hike was paused. With this, fascination prices attained 5.25-5.5% in the 3rd quarter, marking the greatest stage in all-around 22 decades.

Supplied the increase in interest costs in the quarter, the enterprise is envisioned to have seen bigger funding costs. This is probable to have enhanced desire charges in the third quarter. We expect the exact same to be $168.2 million in third-quarter 2023.

With this, the consensus estimate for third-quarter NII of $310 million suggests a 75.2% increase from the yr-back documented figure.

Substantial volatility, huge spreads and an improve in benchmark premiums resulted in a demanding ecosystem in the third quarter of 2023 for the mounted-money marketplaces. Amid the market place turbulence, Agency mortgage-backed securities (MBS) are envisioned to have underperformed. This is possible to have affected AGNC Investment’s guide value.

Bigger volatility in the preset-cash flow markets is probable to have increased asset impairment dangers and hedging mismatches for AGNC Financial investment in the quarter underneath overview. In anticipation of a possible recession, spread widening and increased volatility, the firm is expected to have rotated into agency assets from credit rating-delicate assets.

Distribute widening is also predicted to have resulted in unrealized gains on investments for AGNC Investment decision in third-quarter 2023.

The company’s things to do in the quarter were being inadequate to attain analysts’ assurance. As such, the Zacks Consensus Estimate of web unfold and dollar roll money for each prevalent share has been unrevised to 54 cents in the past month. Also, it suggests a tumble of 35.7% from the yr-ago claimed figure. We estimate the metric to be 51 cents in the quarter to be claimed.

Earnings Whispers

Our tested product does not demonstrate that AGNC Financial investment is possible to conquer estimates this quarter. This is since a inventory needs to have the mixture of a positive Earnings ESP and a Zacks Rank #1 (Sturdy Obtain), 2 (Purchase) or at least 3 (Maintain) for this to take place.

You can uncover the ideal shares to get or provide right before they are documented with our Earnings ESP Filter.

Earnings ESP: AGNC Investment’s Earnings ESP is .00%.

Zacks Rank: The corporation at present carries a Zacks Rank of 2.

Stocks Worthy of a Glance

Two shares from the broader REIT sector, which you may perhaps want to contemplate as our model displays that these have the correct mix of things to report a surprise this time all around, are Welltower Well and Simon House Group SPG.

Welltower is slated to report its quarterly quantities on Oct 30. Very well presently has an Earnings ESP of +.45% and a Zacks Rank of 2. You can see the complete listing of today’s Zacks #1 Rank shares below.

Simon Home is slated to report its quarterly numbers on Oct 30. SPG has an Earnings ESP of +.12% and a Zacks Rank of 3 at present.

Keep on top rated of approaching earnings bulletins with the Zacks Earnings Calendar.

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