Ahead of the Bell: Annaly Capital upgraded

A JPMorgan Securities analyst on Wednesday upgraded the stock of Annaly Capital Management to "Overweight" from "Neutral," saying the company is a beneficiary of the government's recent takeover of Fannie Mae and Freddie Mac.

In a note to clients, analyst Andrew Wessel also increased his full-year profit estimate to $2.37 per share from $2.36 per share, reflecting his expectation that the company's book value has improved.

The company benefits from the government's recent takeover of Fannie Mae and Freddie Mac, Wessel said noting that agency mortgage-back securities have rallied since the government guaranteed full payment of principal and interest to bondholders.

Additionally, Annaly would benefit from further interest rate cuts by the Federal Reserve, which continues to be a more likely scenario than an increase in rates due to the ongoing market turmoil.