Angel Oak Mortgage (NYSE:AOMR) stock tanked 9.2% in Monday afternoon trading after Bank of America analyst Derek Hewett downgraded the mortgage REIT to Underperform from Buy, arguing that near-term risks remain skewed to the downside.
AOMR stock is changing hands at $6.04 as of 2:40 p.m. ET, marking new all-time lows after the company first started trading at $18.65 on June 17, 2021.
The company, which invests in first lien non-qualified mortgage loans and other mortgage-related assets, is suffering from near-term headwinds such as wider credit spreads amid high volatility across the fixed income and securitization markets, the analyst wrote in a note.
"Illiquidity and dislocation in the securitization market has limited access to permanent non-course financing, which unlocks liquidity that can be recycled into new purchases," according to the note.
The Underperform rating disagrees with the average Wall Street analyst rating of Buy.