Is PennyMac’s Mortgage Servicing Rights Deal Shifting Annaly’s Portfolio Strategy and Outlook (NLY)?

• In September 2025, PennyMac Financial Services announced a partnership with Annaly Capital Management, selling a portfolio of mortgage servicing rights while retaining subservicing responsibilities.
• This collaboration is poised to broaden Annaly's servicing network and supports PennyMac’s expansion in the subservicing sector.
• We’ll explore how this mortgage servicing rights agreement may impact Annaly's portfolio diversification and longer-term business outlook.

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Annaly Capital Management Investment Narrative Recap

Annaly Capital Management attracts shareholders who believe in the resilience and growth potential of its mortgage servicing rights (MSR) and residential credit businesses, even in periods of heightened rate volatility. While the new deal with PennyMac could diversify Annaly’s portfolio in the near term, its removal from the FTSE All-World Index does not materially change the most important catalyst, MSR-related revenue growth, or heighten the key risk of earnings volatility driven by interest rate and spread fluctuations.

Of the recent developments, the Q3 2025 dividend announcement stands out, reaffirming management’s confidence in ongoing capital returns amid shifting market sentiment. This dividend declaration is timely, given that steady, sustainable distributions remain a central catalyst and indicator of shareholder value as the company integrates new MSR assets and faces potential portfolio volatility.

However, investors should also keep in mind that, despite renewed growth initiatives, in contrast to expectations for stability, earnings could remain sensitive to...

Read the full narrative on Annaly Capital Management (it's free!)

Annaly Capital Management is projected to achieve $3.4 billion in revenue and $3.2 billion in earnings by 2028. This outlook is based on a forecasted annual revenue growth rate of 46.9% and an increase in earnings of about $2.6 billion from the current $575.1 million.

Uncover how Annaly Capital Management's forecasts yield a $21.20 fair value, in line with its current price.

Exploring Other Perspectives

Simply Wall St Community members provided 11 unique fair value forecasts for Annaly Capital Management, ranging from US$16 to US$33.67 per share. While many see upside, the risk of earnings swings due to interest rate volatility is top of mind and could drive further divergence in viewpoints.

Explore 11 other fair value estimates on Annaly Capital Management - why the stock might be worth 23% less than the current price!

Build Your Own Annaly Capital Management Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Annaly Capital Management research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Annaly Capital Management research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Annaly Capital Management's overall financial health at a glance.

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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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