We Find ARR Compelling At Current Prices, Says MLV
MLV analyst Richard Eckert reiterated a Buy rating on ARMOUR Residential REIT (NYSE:ARR) with a price target of $4.50, which represents a potential upside of 13% from where the stock is currently trading.
Eckert observed, “Short-term rates remain pinned to the policy rate, which remains firmly anchored to 0-25 bp. Long-term Treasuries are trading at yields 200-300 bp higher. We think the volatility will subside some and that no matter where long-term rates go, there will be plenty of room between the two sets of rates to generate competitive, even above market returns. We, therefore, made the argument in a 7/27/2014 industry report, The Agency, or “Rates”, Opportunity that a “rates” strategy would prevail over a “credit” strategy over our forecast horizon. Nothing has altered that conclusion. Similarly, nothing has altered our conclusion that the agency mREITs are a very effective, if not ideal, means of capitalizing on that thesis. We believe the total return potential of ARR shares at current market values, 29%–even after lopping off 50¢, or 10%, from our previous price target of $5.00–bears that out. Therefore, we continue to rate”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Richard Eckert has a total average return of 7.1% and a 100.0% success rate. Eckert has a 16.3% average return when recommending ARR, and is ranked #1451 out of 3355 analysts.