Annaly Capital (NLY) Stock Forecast & Price Target

Annaly Capital Management is supported by a diversified capital-allocation framework that balances Agency MBS, Residential Credit, and MSRs, reducing reliance on any single spread environment while preserving flexibility to rotate toward the highest-return assets. Its 1Q and 1Q26 updates showed resilient fundamentals, with book value per share at $19.82, then recovering to about $20.45 as of 4/22, economic returns of 1.5% and +153bp, and EAD again exceeding the dividend, while $509mm of accretive ATM capital and expanding warehouse capacity to $7.6B strengthened growth optionality. Positive agency technicals, mid-teen new-money ROEs, $9.0B of financing availability, and the 10th consecutive quarter of positive economic returns reinforce the view that the company can compound value even as mortgage spreads and rate volatility shift.

Annaly Capital Management is under pressure because its book value per share fell 1.9% sequentially to $19.82, while GAAP EPS of $0.33 was well below expectations due to $672mm of fair value losses on investments, underscoring how quickly rate-driven mark-to-market swings can erode reported earnings and capital. Although EAD of $0.76/share and NII of $453mm beat estimates, the net interest spread still narrowed to 142bp as asset yields compressed and the portfolio rotated into lower coupons, signaling weaker core earning power. The negative outlook is further supported by the company’s heavy leverage and reliance on agency MBS, which leaves it exposed to higher funding costs, prepayment risk, funding-market stress, and policy shifts affecting the GSE-backed market.