Angel Oak Mortgage stock started at Buy at Janney on growth potential By Investing.com

On Wednesday, Janney Montgomery Scott initiated coverage on shares of Angel Oak Mortgage Inc (NYSE:), issuing a Buy rating and establishing a price target of $13.00.

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The research firm highlighted the company’s strong position in the non-qualified mortgage (non-QM) sector, which is anticipated to see exponetial growth in the coming years.

According to Janney analysts, Angel Oak Mortgage boasts a robust balance sheet and solid credit performance. They noted the company’s ability to invest and grow through its partnership with an affiliated lender, which provides the flexibility to capitalize on the expanding non-QM market. The analysts pointed out that the active rotation of Angel Oak Mortgage’s shareholder base presents a current buying opportunity.

The analysts expect Angel Oak Mortgage to achieve mid-single-digit growth in book value per share and anticipate an expansion of the multiple toward economic book value per share. They also projected that the company’s return on equity (ROE) would continue to be in the mid-double-digit range.

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The fair value estimate of $13.00 per share set by Janney is based on approximately 0.9 times the economic book value per share. Furthermore, the firm forecasted a pro forma dividend yield of 9.8% for Angel Oak Mortgage. Should the company meet these expectations, it would result in a total return of 43%, as per Janney’s analysis.

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