Annaly issuance authorization may be driving weakness, says Keefe Bruyette

Keefe Bruyette keeps an Outperform rating on Annaly Capital with a $21.50 price target after the company filed a prospectus for a new $1.5B at-the-money issuance authorization. The company reported an updated share count of 538M, up from 501M in Q2, suggesting 37M of share issuance, which equates to roughly $725M in equity and increases the share count by 7.4%, the analyst tells investors in a research note. While the firm assumes the issuance was accretive to book value, it says the size of the issuance could be driving weakness in the shares. Annaly shares are down 2% to $20.44 in midday trading.