Freddie Mac (OTCMKTS:FMCC) Shares Gap Up - Should You Buy?

Key Points

• Price move: Freddie Mac shares gapped up premarket, opening at $7.65 vs a prior close of $7.126 and last trading at $7.91 (up about 9.7%) on volume of ~1.10 million shares.
• Analyst outlook: The consensus rating is Moderate Buy with an average target of $15.17, while recent coverage ranges from BTIG’s $20 buy to Mizuho’s $9 outperform and KBW’s $8.50 underperform.
• Recent results and fundamentals: Freddie Mac reported $0.01 EPS and $6.13B revenue (vs. $5.61B est.) for the quarter, but shows a negative ROE (~-65%) and a negative P/E (-391) with a market cap of about $5.08B.

Freddie Mac (OTCMKTS:FMCC - Get Free Report) gapped up prior to trading on Monday . The stock had previously closed at $7.1260, but opened at $7.65. Freddie Mac shares last traded at $7.91, with a volume of 1,099,124 shares changing hands.

Analyst Upgrades and Downgrades

A number of brokerages have issued reports on FMCC. Mizuho began coverage on shares of Freddie Mac in a report on Monday. They issued an "outperform" rating and a $9.00 target price on the stock. Keefe, Bruyette & Woods cut their price target on Freddie Mac from $9.00 to $8.50 and set an "underperform" rating on the stock in a report on Monday, April 20th. Finally, BTIG Research began coverage on Freddie Mac in a research report on Monday, January 26th. They set a "buy" rating and a $20.00 price objective for the company. One equities research analyst has rated the stock with a Strong Buy rating, three have assigned a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat.com, Freddie Mac has a consensus rating of "Moderate Buy" and an average target price of $15.17.

Freddie Mac Trading Up 9.7%

The firm has a 50-day moving average of $6.04 and a 200 day moving average of $8.15. The stock has a market capitalization of $5.08 billion, a price-to-earnings ratio of -391.00 and a beta of 1.69.

Freddie Mac (OTCMKTS:FMCC - Get Free Report) last announced its quarterly earnings results on Thursday, April 30th. The company reported $0.01 earnings per share (EPS) for the quarter. The company had revenue of $6.13 billion during the quarter, compared to analyst estimates of $5.61 billion. Freddie Mac had a negative return on equity of 65.39% and a net margin of 8.61%. Equities research analysts predict that Freddie Mac will post 3.94 EPS for the current fiscal year.

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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