On Wednesday, Keefe, Bruyette & Woods adjusted their outlook on Federal Agricultural (NYSE:AGM) Mortgage Corp, known as Farmer Mac (NYSE: AGM) shares, by revising the price target downward to $212 from the previous $225. The firm maintained its Outperform rating on the stock despite the change.
The revision in the price target comes after the analyst at Keefe, Bruyette & Woods assessed the company's first-quarter performance and projected earnings.
The expected earnings for 2024 and 2025 were reduced to $16.42 and $17.68, respectively, down from the earlier estimates of $17.40 and $18.54. This adjustment reflects a lower earnings run rate in the first quarter and anticipated narrower spreads in the coming years.
The analyst noted that the spreads for 2024 and 2025 are estimated to decrease to 115 basis points (bp) and 112 bp, respectively, from the previous 116 bp and 114 bp. This change is based on the lower spread observed in the first quarter and the expectation that spreads will modestly decline from these levels.
Despite the reduction in the price target and earnings estimates, Keefe, Bruyette & Woods reiterated their positive stance on Farmer Mac's long-term growth potential. The new price target of $212 is set at 12 times the estimated earnings for 2025, reflecting the firm's confidence in the company's prospects.
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