Fannie Mae (OTCMKTS:FNMA) Posts Earnings Results, Beats Estimates By $0.05 EPS

Fannie Mae (OTCMKTS:FNMA) posted its earnings results on Wednesday. The financial services provider reported $0.68 EPS for the quarter, topping the consensus estimate of $0.63 by $0.05, Zacks reports. Fannie Mae had a net margin of 4.53% and a negative return on equity of 65.94%.

Here are the key takeaways from Fannie Mae’s conference call:

• Strong quarterly performance: Net income rose 7% quarter-over-quarter and 20% year-over-year to $4.0 billion, while net revenues increased 4% to $7.6 billion. The company said its $4.1 trillion guaranty book and disciplined expense management supported results.
• Net worth surpassed $116 billion, further reducing Fannie Mae’s regulatory capital deficit and strengthening its ability to provide housing-market liquidity. The company supplied $125 billion in second-quarter liquidity, supporting approximately 417,000 households.
• Cost efficiency continued to improve: Non-interest expense declined 5% quarter-over-quarter and 11% year-over-year, while the administrative expense ratio remained below 11%. Management also cited technology and AI investments as potential longer-term productivity drivers.
• Credit costs increased, particularly in multifamily. The total allowance rose $161 million, including a $102 million multifamily increase driven by weaker property valuations, slower net operating income growth, and newly serious delinquencies; management expects multifamily market challenges to produce additional delinquencies.
• Interest-rate risk management affected comprehensive income: Fannie Mae increased longer-term rate exposure, including U.S. Treasury securities, and recorded $150 million in net unrealized losses on its available-for-sale portfolio due to higher long-term rates.

Fannie Mae Price Performance

Shares of OTCMKTS:FNMA traded down $0.21 during trading on Wednesday, hitting $5.90. 2,446,854 shares of the company were exchanged, compared to its average volume of 5,757,995. Fannie Mae has a 52-week low of $3.60 and a 52-week high of $15.99. The stock has a 50 day moving average of $6.51 and a 200 day moving average of $7.21. The company has a market cap of $6.83 billion, a PE ratio of 590.59 and a beta of 1.62.

Analyst Ratings Changes

Several analysts have recently commented on FNMA shares. Keefe, Bruyette & Woods lowered their price objective on Fannie Mae from $10.00 to $8.50 and set an “underperform” rating for the company in a research note on Monday, April 20th. BTIG Research downgraded shares of Fannie Mae from a “buy” rating to a “neutral” rating in a report on Tuesday, June 16th. Mizuho initiated coverage on shares of Fannie Mae in a research note on Monday, May 4th. They issued an “outperform” rating and a $10.00 target price for the company. Zacks Research raised shares of Fannie Mae from a “strong sell” rating to a “hold” rating in a research report on Tuesday, April 21st. Finally, Wedbush lowered shares of Fannie Mae from an “outperform” rating to a “neutral” rating and set a $8.00 price objective for the company. in a research note on Friday, May 1st. One research analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, four have given a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat, Fannie Mae currently has an average rating of “Hold” and an average price target of $12.75.

About Fannie Mae

The Federal National Mortgage Association, commonly known as Fannie Mae (OTCMKTS:FNMA), is a government-sponsored enterprise established by Congress in 1938 as part of the New Deal to support the U.S. housing market. Headquartered in Washington, DC, Fannie Mae’s mission is to promote liquidity, stability and affordability in the mortgage market. The company operates by purchasing residential mortgage loans from financial institutions, pooling them into mortgage-backed securities (MBS), and providing guarantees to investors against borrower default.

In its core business, Fannie Mae works with mortgage lenders across the United States—including banks, credit unions and mortgage finance companies—to ensure a steady flow of capital for homebuyers and homeowners seeking refinancing.