JPMorgan analyst Richard Shane upgraded Annaly Capital to Overweight from Neutral and raised his price target for the shares to $10.50 from $10. The analyst has an "incrementally constructive" outlook on the rates-focused agency mortgage real estate investment trusts. Annaly's agency mortgage-backed security portfolio could outperform in a cyclical downturn environment as flight-to-quality assets, Shane tells investors in a research note. Further, the analyst believes a potential moderation of Federal Reserve interest rate tightening in 2019 and 2020 may be a positive catalyst for fixed-rate agency mortgage-backed securities. As the largest residential mortgage REIT, Annaly Capital also benefits from scale and diversification, says the analyst.