Compass Point starts AGNC Investment with a Buy

As previously reported, Compass Point initiated coverage of AGNC Investment with a Buy rating and $10.25 price target, citing three primary reasons that the firm thinks “now is the time to dip a toe back in the water and build positions in selected mREITs.” The FOMC has effectively pivoted from the tightening cycle to normalization of monetary policy, even if the first leg down in the fed funds target rate is not until the second half of 2024; the demand for agency MBS bonds exceeds supply; and bond market volatility has meaningfully subsided after peaking last March, the analyst argues, leading it to argue that mREITs that invest in a levered agency MBS portfolio are in the best position to benefit from these economic and bond market trends.