Angel Oak Mortgage lands Buy rating from Jones on growth prospects
Jones Research has given Angel Oak Mortgage REIT (NYSE:AOMR) a Buy rating, citing growth prospects as the Federal Reserve's rate cuts may boost origination volumes. Analyst Matthew Erdner believes the company can benefit from a capital-light model and potential book value appreciation. He anticipates high-teen returns on equity due to its asset creation capabilities and strong securitization track record. Despite a 2.3% decline this year, shares are up 25% year-over-year, aligning with the average Wall Street Buy rating.
Jones Research initiated coverage on Angel Oak Mortgage REIT (NYSE:AOMR) with a Buy rating in a recent note as the Federal Reserve's rate-cutting cycle is expected to open the door to increased origination volumes.
That would leave the real estate finance company "in a position to benefit from a capital-light business model while gaining additional book value appreciation from fair value recoveries of its portfolio holdings," analyst Matthew Erdner wrote in a note to clients.
He sees the potential for Angel Oak (AOMR) to generate high-teen return on equity over the near-term, given "its ability to create their own assets and a steady track record of securitizations," the Tuiesday note said.
Erdner's Buy rating agrees with the average Wall Street analyst rating of Buy.
Shares of the mortgage REIT are down 2.3% this year and up 25% from a year before, lagging the broader stock market in both periods.