Fannie Mae (OTCMKTS:FNMA) Issues Quarterly Earnings Results

Fannie Mae (OTCMKTS:FNMA) posted its quarterly earnings results on Wednesday. The financial services provider reported $0.72 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.66 by $0.06, Zacks reports.

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

• Net income rose to $4.2 billion in the third quarter, up 5% sequentially and 8% year over year, while net worth grew to more than $119 billion. Net revenues reached $7.7 billion, supported by the stable guaranty business.
• Fannie Mae reported continued progress on financial efficiency, including a $27 million quarter-over-quarter reduction in administrative expenses and a 47-basis-point improvement in its expense ratio. The company also expanded its retained mortgage portfolio and increased net interest margin to 69.2 basis points year to date.
• Credit risk increased as the company recorded a $1.1 billion combined provision for single-family and multifamily credit losses, driven by higher interest rates, weakening multifamily metrics, and lower property-value forecasts. Both single-family and multifamily serious delinquency rates rose to 62 basis points.
• Elevated mortgage rates pressured refinancing, single-family acquisitions, multifamily volumes, property values, and affordability. Fannie Mae said it expects ongoing multifamily market challenges to produce additional delinquencies if conditions persist.

Fannie Mae Trading Down 0.7%

OTCMKTS FNMA traded down $0.03 on Wednesday, hitting $4.26. The company’s stock had a trading volume of 465,860 shares, compared to its average volume of 5,302,010. Fannie Mae has a 52-week low of $2.96 and a 52-week high of $12.39. The company’s 50-day simple moving average is $4.94 and its 200 day simple moving average is $6.56.

Wall Street Analyst Weigh In

Several research analysts have recently commented on the company. B. Riley Financial decreased their price objective on Fannie Mae from $8.00 to $7.00 and set a “neutral” rating on the stock in a report on Thursday, July 30th. Wedbush restated a “hold” rating and set a $3.50 target price on shares of Fannie Mae in a report on Thursday, October 22nd. Keefe, Bruyette & Woods dropped their target price on Fannie Mae from $6.25 to $3.50 and set an “underperform” rating for the company in a report on Monday, September 28th. Finally, Mizuho set a $5.00 price target on Fannie Mae and gave the stock a “neutral” rating in a research report on Monday, October 12th. Five analysts have rated the stock with a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, Fannie Mae has an average rating of “Reduce” and a consensus target price of $7.80.

About Fannie Mae

Fannie Mae, formally known as the Federal National Mortgage Association, is a government-sponsored enterprise that supports the U.S. housing finance system. It operates in the secondary mortgage market, purchasing qualifying residential mortgage loans from approved lenders and helping provide liquidity so those lenders can continue offering mortgage financing to homebuyers and homeowners.

Fannie Mae finances its activities primarily by issuing debt and mortgage-backed securities. It also guarantees certain mortgage-backed securities, helping connect mortgage lenders with institutional investors.