Annaly Set to Report Q4 Earnings: What's in Store for the Stock?

Annaly Capital Management Inc. NLY is scheduled to report fourth-quarter 2025 results on Jan. 28, after market close. The company’s net interest income (NII) is expected to reflect year-over-year increases in the quarter to be reported, while earnings are anticipated to remain unchanged.

In the last reported quarter, the mortgage real estate investment trust’s (mREIT) earnings available for distribution per share topped the Zacks Consensus Estimate. The company’s average yield on interest-earning assets improved. However, the company recorded a year-over-year decline in book value per share.

Annaly has a decent earnings surprise history. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 2.91%.

Annaly Capital Management Inc Price and EPS Surprise

Annaly Capital Management Inc price-eps-surprise | Annaly Capital Management Inc Quote

Let us see how things have shaped up before the fourth-quarter earnings announcement.

The consensus estimate for fourth-quarter NII is pegged at $469 million, suggesting a rise from the year-ago quarter’s reported NII of $187.3 million.

The Zacks Consensus Estimate for earnings has been unchanged at 72 cents over the past seven days. The metric indicates no change from the year-ago quarter’s actual.

Factors to Shape NLY’s Q4 Performance

The Federal Reserve reduced interest rates twice in the fourth quarter. As such, mortgage rates come down meaningfully from the start of the year. Hence, refinancing activities and origination volumes witnessed decent growth.

Amid this, a significant portion of NLY’s MBS holdings is anticipated to have witnessed elevated levels of constant prepayment rate. This is expected to have positively impacted net premium amortization in the fourth quarter, thereby supporting growth in interest income and average asset yield.

Agency MBS spreads tightened sharply in the fourth quarter, given lower interest rate volatility. As such, Annaly is likely to have seen some improvement in its book value per share in the quarter to be reported.

Given slower prepayment speeds in the fourth quarter, the company’s mortgage servicing rights portfolio is likely to have been impacted positively to some extent. This is anticipated to have increased NLY's servicing fees in the quarter to be reported.

The Zacks Consensus Estimate for net servicing income of $137.4 million indicates a year-over-year rise of 18.9%.

What the Zacks Model Reveals for Annaly

Our proven model does not show that an earnings beat is likely for NLY this time around. This is because the company does not have the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: Annaly has an Earnings ESP of 0.00%.

Zacks Rank: NLY currently carries a Zacks Rank of 3. 

REIT Stocks to Consider

Here are a couple of REIT stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time:

NETSTREIT Corp. NTST is expected to release fourth-quarter 2025 earnings on Feb. 10. The company has an Earnings ESP of +0.51% and a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Quarterly earnings estimates for NTST have been unchanged at 33 cents per share over the past week.

The Earnings ESP for Equity Residential EQR is +0.64% and it carries a Zacks Rank #3 at present. The company is also likely to report fourth-quarter 2025 results on Feb. 5. 

Over the past week, the Zacks Consensus Estimate for EQR’s quarterly earnings has been unchanged at 28 cents per share.

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This article originally published on Zacks Investment Research (zacks.com).

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