Annaly Capital Management (NLY) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Annaly Capital Management (NLY) closed at $7.17, marking a +1.27% move from the previous day. This move outpaced the S&P 500's daily gain of 0.52%. Meanwhile, the Dow gained 0.54%, and the Nasdaq, a tech-heavy index, added 0.19%.

Heading into today, shares of the real estate investment trust had lost 1.53% over the past month, lagging the Finance sector's gain of 4.37% and the S&P 500's gain of 4.79% in that time.

Wall Street will be looking for positivity from NLY as it approaches its next earnings report date. This is expected to be October 28, 2020. On that day, NLY is projected to report earnings of $0.26 per share, which would represent year-over-year growth of 23.81%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $345 million, up 126.39% from the year-ago period.

NLY's full-year Zacks Consensus Estimates are calling for earnings of $1 per share and revenue of $1.14 billion. These results would represent year-over-year changes of 0% and +13.53%, respectively.

Investors should also note any recent changes to analyst estimates for NLY. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. NLY is currently a Zacks Rank #3 (Hold).

Looking at its valuation, NLY is holding a Forward P/E ratio of 7.12. Its industry sports an average Forward P/E of 8.32, so we one might conclude that NLY is trading at a discount comparatively.

Also, we should mention that NLY has a PEG ratio of 1.42. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The REIT and Equity Trust industry currently had an average PEG ratio of 4.57 as of yesterday's close.

The REIT and Equity Trust industry is part of the Finance sector. This group has a Zacks Industry Rank of 220, putting it in the bottom 14% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow NLY in the coming trading sessions, be sure to utilize Zacks.com.


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