UPDATE: Bank of America Reiterates on Ellington Financial Following Good Q4'13 Results

In a report published Tuesday, Bank of America analyst Kenneth Bruce reiterated a Buy rating on Ellington Financial (NYSE: EFC), and raised the price target from $22.75 to $24.00.

In the report, Bank of America noted, “We are revising our earnings estimates for the mortgage REIT group after generally better than expected Q4'13 results. Results were particularly strong for the agency mortgage REITs that experienced yield expansion due to falling prepayments. That said, we think caution remains warranted for the group given the potential for rising rates going forward. Hybrid mortgage REITs also performed well as they diversified into credit assets.

"The commercial mortgage REIT sector continued to benefit from a favorable investment backdrop in Q4'13, which we expect will persist in '14. Despite the generally strong performance across the sector, we continue to believe that investors will need to be selective in '14 and focus on those companies that have the most effective interest rate hedging strategies and the greatest leverage to an improving economy such as the hybrid and commercial mortgage REITs.”

Ellington Financial closed on Monday at $24.00.