AGNC Investment Q2 Earnings Expected to Decline Due to Shift in Investor Preference

AGNC Investment, a bellwether for mortgage REITs, is expected to report lower Q2 earnings sequentially on July 21st, driven by a shift in investor preference towards riskier assets. The consensus EPS estimate is $0.41, a 22.65% YoY decrease, and revenue is also expected to decline.

AGNC Investment (NASDAQ:AGNC), a prominent player in the mortgage real estate investment trust (REIT) sector, is set to release its second-quarter 2025 earnings on July 21st. Analysts anticipate a notable decline in earnings, driven by a strategic shift towards riskier asset portfolios. The consensus earnings per share (EPS) estimate stands at $0.41, marking a 22.65% year-over-year (YoY) decrease [1].

The company's revenue is also expected to decline, with analysts forecasting a 1,246% YoY growth to $274.9 million [2]. This substantial increase in revenue is a reversal from the 108% decrease recorded in the same quarter last year. However, the company missed analysts' revenue expectations by 73.6% last quarter, reporting revenues of $78 million, down 83.3% year-over-year [1].

AGNC Investment's peers in the banks segment have shown positive performance, with Citigroup and Texas Capital Bank reporting revenue growth of 8% and 15.2%, respectively, and beating analysts' expectations [1]. This positive sentiment among investors in the banks segment has led to an average share price increase of 10.3% over the last month [1]. However, AGNC Investment's stock price has remained unchanged during this period, heading into earnings with an average analyst price target of $9.66 [1].

The company's valuation looks somewhat expensive compared to the industry average, trading at 1.08X forward 12 months price/tangible book TTM (P/TB TTM), above the industry's P/TB TTM multiple of 0.98X [3]. Analysts have set the expected earnings per share (EPS) at $0.41, signifying a substantial 22.65% year-over-year decline [1]. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings [1].

Investors should closely analyze AGNC Investment's upcoming earnings release and market volatility before making an investment decision. The company's premium valuation also warrants caution. AGNC Investment rewards its shareholders handsomely, with a current dividend yield of 15.47%, compared to the industry's average of 11.8% [3].

References:

[1] https://finance.yahoo.com/news/agnc-investment-earnings-look-agnc-030055851.html
[2] https://www.gurufocus.com/news/2988316/agnc-investment-agnc-expected-to-report-lower-q2-earnings-amid-market-shifts
[3] https://finance.yahoo.com/news/agnc-investment-report-q2-earnings-152900030.html