Fannie Mae (OTCMKTS:FNMA) Shares Gap Down – Should You Sell?

Fannie Mae (OTCMKTS:FNMA)’s share price gapped down prior to trading on Friday . The stock had previously closed at $4.88, but opened at $4.25. Fannie Mae shares last traded at $5.3760, with a volume of 5,053,458 shares.

Key Fannie Mae News

Here are the key news stories impacting Fannie Mae this week:

• Positive Sentiment: FHFA loosened condo and rural-loan insurance rules that permit more flexible roof coverage and lower insurance hurdles, which should reduce borrower costs and expand the pool of loans eligible for purchase by the GSEs — a structural benefit for Fannie Mae’s origination business. Read More.
• Neutral Sentiment: Industry commentary frames the insurance updates as fixing real frictions (condo and roof coverage) and lowering homeowner costs, but the near-term boost to Fannie’s earnings is uncertain pending implementation details and timing. Read More.
• Negative Sentiment: Investor confidence is dented by growing uncertainty around privatization plans; unclear policy direction reduced expectations for shareholder upside and contributed to heavy selling pressure in Fannie and Freddie shares. Read More.
• Negative Sentiment: Broader market headwinds — a significant drop in mortgage applications, higher interest rates, and institutional rebalancing — are cited as key drivers of the stock’s slide this week, limiting near-term originations and investor appetite for FNMA. Read More.

Wall Street Analysts Forecast Growth

Several equities analysts have recently issued reports on the stock. Wedbush assumed coverage on shares of Fannie Mae in a research note on Tuesday, November 25th. They issued an “outperform” rating and a $11.50 price objective on the stock. BTIG Research began coverage on shares of Fannie Mae in a research note on Monday, January 26th. They set a “buy” rating and a $20.00 target price for the company. Zacks Research cut shares of Fannie Mae from a “hold” rating to a “strong sell” rating in a report on Wednesday, February 11th. Finally, B. Riley Financial restated a “neutral” rating on shares of Fannie Mae in a research report on Thursday, February 12th. One research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, one has assigned a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the stock has a consensus rating of “Hold” and a consensus target price of $14.30.

Fannie Mae Stock Performance

The stock has a 50 day moving average of $7.81 and a two-hundred day moving average of $10.18. The stock has a market cap of $5.82 billion, a PE ratio of 1.90 and a beta of 1.78.

Fannie Mae (OTCMKTS:FNMA) last posted its quarterly earnings data on Wednesday, February 11th. The financial services provider reported $0.60 EPS for the quarter, missing analysts’ consensus estimates of $0.68 by ($0.08). Fannie Mae had a net margin of 2.22% and a negative return on equity of 49.21%. The firm had revenue of $7.33 billion for the quarter, compared to analysts’ expectations of $7.33 billion.

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.