Compass Point Raises Price Target on Invesco Mortgage Capital, Sees Opportunity in Wide Spreads
In a move highlighting confidence in a niche segment of the real estate market, Compass Point Research & Trading has reaffirmed its Buy rating on Invesco Mortgage Capital Inc. (NYSE: IVR) and raised its price target to $9.50 from $9.00. The firm's analysis, issued on January 16, points to wider-than-average mortgage spreads as a primary factor that could drive an increase in the company's book value per share.
"Current spreads in the agency mortgage-backed securities market present a favorable environment for mREITs like Invesco Mortgage," the Compass Point report noted. The firm anticipates these margins will gradually narrow as interest rate volatility subsides and the yield curve steepens, potentially benefiting the REIT's earnings profile.
Supporting the investment case, Invesco Mortgage Capital recently announced its first monthly dividend of $0.12 for January 2026, maintaining a payout rate consistent with its prior quarterly dividend of $0.36. The company also provided preliminary financials, estimating its book value per share to be between $8.94 and $9.30 as of January 12, 2026. The midpoint of this range, $9.12, sits slightly below Compass Point's own forecast of $9.24, suggesting analysts see room for outperformance.
Invesco Mortgage Capital, based in Georgia, invests in, finances, and manages a portfolio primarily consisting of residential and commercial mortgage-backed securities. The mREIT sector is often sensitive to interest rate movements and the shape of the yield curve, making analyst calls on specific spreads a critical piece of investment thesis.
Market Voices: A Mixed Bag of Reactions
Michael Chen, Portfolio Manager at Horizon Advisors: "Compass Point's target hike is a logical read of the data. The spread story is real, and IVR is positioned to capture that value. For income-focused investors, the shift to a monthly dividend is also a positive signal of cash flow stability."
Sarah Gibson, Independent Fixed-Income Analyst: "While the spread argument has merit, it feels like a short-term technical play. The entire mREIT model remains vulnerable to sudden Fed pivots. I'd want to see more resilience in the core portfolio before jumping in based on a single price target adjustment."
David R. Miller, a retail investor commenting on a financial forum: "This is just more Wall Street noise. They raise a target by fifty cents and act like they've discovered gold. Meanwhile, the stock's been stuck for years. These firms are always 'citing' something—spreads, curves, whatever—to justify their existence. Show me real shareholder returns, not another report."
Eleanor Vance, Senior Researcher at The Brookings Institute: "Analyst actions on mREITs like IVR are a useful barometer for professional sentiment on the mortgage market's technicals. However, retail investors should understand this is a highly specialized and leveraged bet on interest rate differentials, not a traditional real estate play."