Ellington Financial downgraded to Neutral from Outperform at Credit Suisse

Credit Suisse analyst Douglas Harter downgraded Ellington Financial to Neutral from Outperform with a $14 price target. The analyst sees better total return opportunities among other mREITs given their higher-than-peer average price-to-book multiple. The significant level of rate increases in 2022 will likely continue to act as a headwind on the mortgage finance sector in 2023 as origination volume remain muted, Harter notes. However, interest rate volatility is likely to moderate during the year, which could act as a tailwind for Agency MBS book values, he adds. Further, the analyst believes credit quality is likely to weaken over the course of the year given expectations for rising unemployment, but should continue to benefit from the high levels of embedded HPA from the prior years.