What is actually in the Cards for AGNC Investment’s (AGNC) Q3 Earnings?

AGNC Expenditure Corp. AGNC is scheduled to report its third-quarter 2023 benefits on Oct 30, 2023, immediately after the closing bell. The company’s results are predicted to reflect a 12 months-over-calendar year drop in earnings, although the major line is probably to rise.

This Bethesda, MD-based mortgage loan authentic estate investment decision believe in (mREIT) posted a 2nd-quarter 2023 web unfold and dollar roll revenue for each widespread share (excluding believed “catch-up” high quality amortization costs) of 67 cents beat the Zacks Consensus Estimate of 58 cents. Adjusted internet interest and dollar roll profits (excluding estimated “capture-up” quality amortization costs) of $493 million remained flat with the quarter-in the past documented amount.

Around the trailing four quarters, the company surpassed the Zacks Consensus Estimate on all situations. It has an earnings surprise of 14.8%, on average, for the said period of time. The graph underneath depicts the surprise historical past:

AGNC Expenditure Corp. Price tag and EPS Shock


AGNC Investment Corp. Cost and EPS Shock

AGNC Expense Corp. rate-eps-surprise | AGNC Financial investment Corp. Quotation

Let us see how points have formed up prior to the third-quarter earningsannouncement.

Mortgage premiums continued to enhance in the 3rd quarter, with the rate on a 30-12 months preset home finance loan reaching 7.31% in September, the highest stage in approximately 23 several years. The climb in home finance loan rates, which kept household prospective buyers on the sidelines, led to a scaled-down origination market, equally buy and refinancing, than the prior-calendar year quarter.

Nevertheless, reduce concentrations of refinancing are predicted to have lowered prepayment speed and alleviated stress from AGNC’s MBS holdings. This is anticipated to have reduced web top quality amortization in the third quarter, presenting scope for development in desire profits and average asset yield. Also, we assume an fascination income of $478.5 million, suggesting a 28.3% yr-in excess of-12 months increase.

Federal Reserve raised desire rates by a different 25 foundation factors in the quarter less than overview. So, the policy fee reached 5-5.25% in July 2023, marking the 11th time FOMC has hiked interest costs in a tightening course of action that began in March 2022. In September, the level hike was paused. With this, desire costs arrived at 5.25-5.5% in the 3rd quarter, marking the optimum stage in around 22 a long time.

Offered the rise in curiosity fees in the quarter, the business is envisioned to have seen greater funding expenditures. This is probable to have enhanced curiosity expenses in the 3rd quarter. We anticipate the exact same to be $168.2 million in third-quarter 2023.

With this, the consensus estimate for 3rd-quarter NII of $310 million indicates a 75.2% rise from the 12 months-back described determine.

High volatility, extensive spreads and an increase in benchmark prices resulted in a difficult surroundings in the 3rd quarter of 2023 for the mounted-revenue markets. Amid the market turbulence, Agency home loan-backed securities (MBS) are envisioned to have underperformed. This is probably to have affected AGNC Investment’s e book worth.

Bigger volatility in the set-money marketplaces is probable to have enhanced asset impairment dangers and hedging mismatches for AGNC Investment in the quarter under review. In anticipation of a likely economic downturn, unfold widening and larger volatility, the business is envisioned to have rotated into agency assets from credit-delicate property.

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

The company’s things to do in the quarter were being insufficient to acquire analysts’ confidence. As these kinds of, the Zacks Consensus Estimate of internet unfold and dollar roll income per popular share has been unrevised to 54 cents in the past month. Also, it signifies a fall of 35.7% from the yr-ago reported determine. We estimate the metric to be 51 cents in the quarter to be reported.

Earnings Whispers

Our verified model does not clearly show that AGNC Investment decision is possible to beat estimates this quarter. This is for the reason that a inventory requirements to have the mix of a positive Earnings ESP and a Zacks Rank #1 (Potent Purchase), 2 (Invest in) or at minimum 3 (Hold) for this to occur.

You can uncover the most effective shares to purchase or promote just before they are described with our Earnings ESP Filter.

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

Zacks Rank: The corporation at the moment carries a Zacks Rank of 2.

Shares Worthy of a Search

Two stocks from the broader REIT sector, which you may perhaps want to look at as our model exhibits that these have the proper blend of factors to report a surprise this time about, are Welltower Well and Simon Home Group SPG.

Welltower is slated to report its quarterly figures on Oct 30. Very well presently has an Earnings ESP of +.45% and a Zacks Rank of 2. You can see the comprehensive record of today’s Zacks #1 Rank shares in this article.

Simon Residence 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.

Continue to be on best of impending earnings bulletins with the Zacks Earnings Calendar.

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