Is Annaly Capital Management (NLY) Offering Value After Recent Share Price Weakness?

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If you are asking whether Annaly Capital Management at US$21.45 is offering good value today, the next sections will walk through the numbers in a clear, structured way. The stock is down 1.1% over the past week, 5.2% over the past month, and 6.3% year to date, even though the 1 year and 3 year returns stand at 30.7% and 74.0% respectively, with a 5 year return of 12.7%. Recent coverage has focused on Annaly as a large mortgage REIT and how its portfolio positioning and interest rate sensitivity relate to its share price moves, with investors watching how macro data and policy signals feed into sentiment. Market commentary has also highlighted the stock's income profile and capital allocation decisions as key pieces of context for recent price swings. On Simply Wall St's valuation checks, Annaly Capital Management scores 5 out of 6 for potential undervaluation, as shown by its valuation score. The rest of this article will compare different valuation approaches and will also point you to a more complete way to think about value at the end.

Annaly Capital Management delivered 30.7% returns over the last year. See how this stacks up to the rest of the Mortgage REITs industry.

Approach 1: Annaly Capital Management Excess Returns Analysis

The Excess Returns model looks at how much profit a company generates over and above the return that equity investors require, then capitalizes those extra profits into an estimate of intrinsic value per share.

For Annaly Capital Management, the starting point is a Book Value of US$19.82 per share and a Stable EPS of US$3.07 per share, based on weighted future Return on Equity estimates from 4 analysts. The model applies a Cost of Equity of US$2.21 per share, which implies an Excess Return of US$0.86 per share after compensating shareholders for their required return. That excess is linked to an average Return on Equity of 14.79% and a Stable Book Value assumption of US$20.73 per share, sourced from 5 analysts.

Using these inputs, the Excess Returns framework arrives at an estimated intrinsic value of about US$32.75 per share, compared with the current share price of US$21.45. This gap implies the stock is about 34.5% undervalued on this model.

Result: UNDERVALUED

Our Excess Returns analysis suggests Annaly Capital Management is undervalued by 34.5%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks.

Story Continues

NLY Discounted Cash Flow as at May 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Annaly Capital Management.

Approach 2: Annaly Capital Management Price vs Earnings

For a profitable company, the P/E ratio is a useful way to relate what you are paying for each share to the earnings that support it. It gives you a quick sense of how many dollars of price the market is assigning to each dollar of earnings.

What counts as a "normal" P/E depends on how the market views a stock's growth prospects and risks. Higher expected growth or lower perceived risk can justify a higher P/E, while lower expected growth or higher risk usually points to a lower P/E.

Annaly Capital Management currently trades on a P/E of 7.76x. That is below both the Mortgage REITs industry average P/E of 11.98x and the peer average of 10.25x. Simply Wall St also calculates a Fair Ratio of 13.53x for Annaly, which is an estimate of the P/E that would be expected given factors such as its earnings profile, industry, profit margins, market cap and risk characteristics.

This Fair Ratio is more tailored than a simple comparison with peers or the industry, because it adjusts for company specific features instead of assuming all stocks deserve the same multiple. Comparing the Fair Ratio of 13.53x with the current P/E of 7.76x indicates that the stock trades below this model-based indication of fair value.

Result: UNDERVALUEDNYSE:NLY P/E Ratio as at May 2026

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Upgrade Your Decision Making: Choose your Annaly Capital Management Narrative

Earlier it was mentioned that there is an even better way to think about valuation. Narratives on Simply Wall St let you turn your view of Annaly Capital Management into a clear story that links what you believe about its mortgage and MSR portfolio, revenue, earnings and margins to a financial forecast, a fair value estimate and then a simple comparison between that fair value and today’s share price. All of this happens within an easy tool on the Community page that updates when fresh news or earnings arrive. One investor might build a more optimistic Annaly Narrative around the US$24.00 fair value, revenue of US$2.7b, earnings of US$2.3b and a P/E of 11.9x by 2029, while another might plug in lower earnings or a different P/E and reach a more cautious fair value. This helps each of them decide, on their own terms, whether the current price looks attractive, full or expensive.

Do you think there's more to the story for Annaly Capital Management? Head over to our Community to see what others are saying!NYSE:NLY 1-Year Stock Price Chart

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.

Companies discussed in this article include NLY.

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