BTIG Upgrades Annaly Capital (NLY) to Buy Amid Rising Interest Rate Volatility

Annaly Capital Management, Inc. (NYSE:NLY) ranks among the most undervalued REIT stocks to buy right now. On January 6, BTIG raised Annaly Capital Management, Inc. (NYSE:NLY) from Neutral to Buy, setting a $25 price target on the company’s shares. The firm indicated possible dividend support in today’s low-interest-rate, volatile environment, especially if expectations for additional Fed rate cuts this year remain high.

The firm expects Annaly Capital Management, Inc. (NYSE:NLY) to exhibit additional upside if mortgage-backed securities spreads compared to Treasuries, which are now approaching multi-year lows of roughly 115 basis points, narrow. In addition, the firm pointed to a more stable stock valuation if spreads expand again amid rising interest rate volatility.

Moreover, BTIG noted a drop in long-term interest rates, which could increase prepayment vulnerability in NLY’s MSR and non-QM portfolios, though the firm’s assessment also included some expectation that the Trump presidency will attempt to engineer lower mortgage rates.

Annaly Capital Management, Inc. (NYSE:NLY) is a diversified capital manager that engages in the mortgage finance business. The firm’s portfolio includes securities, loans, and equity in the mortgage finance market.

While we acknowledge the potential of NLY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best Magic Formula Stocks for 2025 and 10 Best Retirement Stocks to Buy According to Hedge Funds.

Disclosure: None. This article is originally published at Insider Monkey.