Federal Agricultural Mortgage (AGM): Valuation Check After New $313.5m Securitization and 2026 Product Plans

Federal Agricultural Mortgage (AGM) just wrapped up a $313.5 million securitization of 343 agricultural mortgage loans, featuring a $290 million guaranteed senior tranche, a move that shines a light on its evolving funding strategy.

See our latest analysis for Federal Agricultural Mortgage.

The latest securitization follows a strong run of corporate moves and earlier gains tied to upbeat earnings. Yet the share price return is still down year to date, even after a robust 1 month share price return of 11.9 percent, while long term investors remain comfortably ahead thanks to a 5 year total shareholder return of 175.8 percent. This suggests momentum has cooled but the long range story is still firmly intact.

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With earnings still growing, a recent securitization under its belt, and the stock trading below analyst targets, is Federal Agricultural Mortgage quietly undervalued, or is the market already pricing in its next leg of growth?

Most Popular Narrative: 21.7% Undervalued

With the narrative fair value sitting well above the last close of $176.92, the implied upside hinges on steady growth and resilient margins.

Accelerating capital needs in agriculture and rural infrastructure, driven by farm consolidation and increased mechanization, are creating a larger addressable market for Farmer Mac's core and new product offerings, underpinning long-term loan growth and greater net interest income.

Read the complete narrative.

Curious how moderate growth assumptions and only slightly lower margins can still support a much higher future earnings multiple than today? See what the narrative is baking in and which forward projections really power that fair value call.

Result: Fair Value of $226 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained credit losses in newer segments or adverse changes to Farmer Mac's GSE status could quickly challenge the market's current undervaluation thesis.

Find out about the key risks to this Federal Agricultural Mortgage narrative.

Another View: Market Ratios Tell a Different Story

Our SWS DCF model points to a fair value of about $135.90, below the current $176.92 share price. This frames Federal Agricultural Mortgage as overvalued on cash flow terms and sharply at odds with the 21.7 percent upside implied by the narrative fair value.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Federal Agricultural Mortgage for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 920 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Federal Agricultural Mortgage Narrative

If you see the story differently or want to stress test your own assumptions using the same data, you can build a fresh view yourself in under three minutes: Do it your way.

A great starting point for your Federal Agricultural Mortgage research is our analysis highlighting 6 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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