Fannie Mae (OTCMKTS:FNMA) Shares Gap Down After Analyst Downgrade

Key Points

• Wedbush downgraded Fannie Mae from Outperform to Neutral with an $8.00 price target, prompting a premarket gap down to $7.5150 from a prior close of $8.15.
• Analyst sentiment is mixed—one Strong Buy, two Buy, three Hold and one Sell—resulting in an average rating of Hold and an average target price of $12.75.
• Fannie Mae reported Q1 EPS of $0.63 (in line with estimates) and $7.28B revenue, while trading at a market cap of $10.27B with a very high PE (~887.9) and negative ROE (‑65.94%); its 50-day MA ($6.83) sits below the 200-day MA ($8.93).

Fannie Mae (OTCMKTS:FNMA - Get Free Report)'s stock price gapped down prior to trading on Monday after Wedbush downgraded the stock from an outperform rating to a neutral rating. The stock had previously closed at $8.15, but opened at $7.5150. Wedbush now has a $8.00 price target on the stock. Fannie Mae shares last traded at $8.95, with a volume of 1,738,897 shares trading hands.

Other equities analysts have also recently issued reports about the stock. BTIG Research started coverage on shares of Fannie Mae in a research note on Monday, January 26th. They set a "buy" rating and a $20.00 price target for the company. Keefe, Bruyette & Woods dropped their price target on shares of Fannie Mae from $10.00 to $8.50 and set an "underperform" rating for the company in a research note on Monday, April 20th. B. Riley Financial reaffirmed a "neutral" rating on shares of Fannie Mae in a research note on Thursday, February 12th. Finally, Zacks Research raised shares of Fannie Mae from a "strong sell" rating to a "hold" rating in a research note on Tuesday, April 21st. One research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, the company currently has an average rating of "Hold" and an average target price of $12.75.

Fannie Mae Trading Up 8.8%

The firm's 50-day moving average price is $6.83 and its two-hundred day moving average price is $8.93. The stock has a market cap of $10.27 billion, a PE ratio of 887.89 and a beta of 1.66.

Fannie Mae (OTCMKTS:FNMA - Get Free Report) last announced its quarterly earnings results on Wednesday, April 29th. The financial services provider reported $0.63 earnings per share for the quarter, hitting the consensus estimate of $0.63. The firm had revenue of $7.28 billion during the quarter, compared to analysts' expectations of $7.25 billion. Fannie Mae had a net margin of 4.53% and a negative return on equity of 65.94%. On average, analysts anticipate that Fannie Mae will post 2.53 earnings per share for the current year.

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.

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