Annaly Capital Management ( NYSE: NLY ) may beat Q2 earnings consensus, but book value can be impacted adversely.
The mortgage REIT is scheduled to announce Q2 earnings results on Wednesday, July 27th, after market close.
The consensus EPS estimate is $0.25 (-16.7% Y/Y) and consensus revenue estimate is $399.39M.
Over the last 2 years, NLY has beaten EPS estimates 100% of the time and revenue estimates 13% of the time.
Over the last 3 months, EPS estimates have seen 3 upward revisions and 4 downward revisions. Revenue estimates have seen 1 upward revision and 2 downward revisions.
Notably, NLY's book value per share fell 15% during Q1 as market turbulence led to agency mortgage-backed securities underpeformance. Q1 earnings, though, topped the average analyst estimate and more than covered its dividend.
For now, home prices hover near historical highs and mortgage rates keep soaring. Housing affordability in the U.S. is about to reach its lowest point since the 2007 Great Financial Crisis, according to a report by S&P Global Ratings released on July 20.
Mortgage REITs and homebuilder stocks may be impacted.
Peer AGNC Investment stock dropped yesterday during after-hours trading after the company's net book value declined in Q2 with weakness in the agency MBS market. AGNC EPS beats by $0.24.
With book value per share trends showing similar patterns in the entire mortgage REIT sector largely, the metric is expected to decline for NLY during Q2.
Here's a quick look at Annaly Capital Management's book value in the last few quarters.
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Annaly Capital Management may beat Q2 earnings consensus, but book value faces decline