Freddie Mac (OTCMKTS:FMCC) Issues Earnings Results

Key Points

• Freddie Mac reported strong Q1 results with $3.6 billion in net income (up 27% year-over-year) and grew net worth to nearly $74 billion, signaling improved earnings power.
• The company’s total mortgage portfolio reached $3.7 trillion and it provided $116 billion of liquidity, helping about 380,000 families—mostly in housing affordable to households at ≤120% of AMI.
• Despite gains, Freddie Mac faces a significant regulatory capital shortfall of about $105 billion (excluding buffers), in part because $73 billion of senior preferred stock does not qualify as regulatory capital.

Freddie Mac (OTCMKTS:FMCC - Get Free Report) issued its quarterly earnings data on Thursday. The company reported $0.01 EPS for the quarter, Zacks reports. Freddie Mac had a net margin of 8.16% and a negative return on equity of 52.46%.

Here are the key takeaways from Freddie Mac's conference call:

• Freddie Mac reported $3.6 billion in Q1 net income (up 27% year-over-year) and grew net worth to nearly $74 billion, underscoring strong earnings power.
• The total mortgage portfolio reached $3.7 trillion and the company provided $116 billion of liquidity, helping about 380,000 families—a majority in housing affordable to households at ≤120% of AMI.
• Freddie Mac recorded a $320 million single-family credit reserve release driven by an upgraded house-price forecast (2.3% next 12 months), which reduced provisions but increases sensitivity to those forecasts.
• The multifamily business shifted toward fully guaranteed securitizations—securitizations more than doubled and guarantee-fee income rose, while non-interest income declined as the revenue mix changed.
• Despite capital gains, Freddie Mac still has a significant regulatory capital shortfall—about $105 billion excluding buffers—partly because $73 billion of senior preferred stock does not qualify as regulatory capital.

Freddie Mac Stock Performance

Shares of Freddie Mac stock traded up $0.53 during trading on Thursday, reaching $7.10. The company had a trading volume of 4,169,257 shares, compared to its average volume of 3,364,941. The company has a market cap of $4.62 billion, a price-to-earnings ratio of -355.00 and a beta of 1.79. Freddie Mac has a fifty-two week low of $3.40 and a fifty-two week high of $14.99. The firm's fifty day moving average is $6.04 and its 200-day moving average is $8.19.

Analyst Upgrades and Downgrades

FMCC has been the topic of a number of recent analyst reports. BTIG Research initiated coverage on shares of Freddie Mac in a research note on Monday, January 26th. They issued a "buy" rating and a $20.00 target price on the stock. Keefe, Bruyette & Woods cut their target price on shares of Freddie Mac from $9.00 to $8.50 and set an "underperform" rating on the stock in a research note on Monday, April 20th. One equities research analyst has rated the stock with a Strong Buy rating, two have given a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $16.71.

Freddie Mac Company Profile

Freddie Mac OTCMKTS: FMCC, officially the Federal Home Loan Mortgage Corporation, is a government-sponsored enterprise chartered by Congress in 1970 to enhance liquidity and stability in the U.S. housing finance system. Headquartered in McLean, Virginia, the company operates under the supervision of the Federal Housing Finance Agency (FHFA) and carries a congressional mandate to support affordable, sustainable homeownership and rental housing markets nationwide.

The company's primary business activities involve purchasing mortgage loans from approved lenders, pooling them into mortgage-backed securities (MBS), and guaranteeing the timely payment of principal and interest to investors.

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