Fannie Mae (OTCMKTS:FNMA) Shares Climb 11.1% After Strong Earnings

Key Points

• Fannie Mae shares jumped 11.1% to $4.61 after the company reported quarterly earnings of $0.72 per share, beating the $0.66 consensus estimate, while revenue of roughly $7.65 billion also exceeded expectations.
• Third-quarter net income rose to approximately $4.2 billion from $4.0 billion in the prior quarter, supported by stronger net interest income and fair-value gains; net worth increased to $119.6 billion.
• Despite the strong results, investors face ongoing concerns including higher provisions for credit losses, unresolved conservatorship issues, and cautious analyst sentiment. The consensus rating remains “Reduce,” with several firms maintaining neutral or underperform ratings.

Fannie Mae (OTCMKTS:FNMA - Get Free Report)'s share price rose 11.1% during trading on Thursday after the company announced better than expected quarterly earnings. The stock traded as high as $4.62 and last traded at $4.61. 2,983,327 shares traded hands during trading, a decline of 44% from the average daily volume of 5,317,765 shares. The stock had previously closed at $4.15.

The financial services provider reported $0.72 earnings per share for the quarter, topping the consensus estimate of $0.66 by $0.06. The company had revenue of $7.65 billion during the quarter, compared to analyst estimates of $7.45 billion. Fannie Mae had a net margin of 4.59% and a negative return on equity of 76.66%.

Key Headlines Impacting Fannie Mae

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

• Positive Sentiment: Third-quarter results exceeded expectations. Fannie Mae reported approximately $4.2 billion in net income, up from $4.0 billion in the prior quarter. Revenue reached about $7.7 billion, while reported earnings of $0.72 per share surpassed the $0.66 consensus estimate. Net worth increased to $119.6 billion, and the company supplied $103 billion of mortgage-market liquidity. Fannie Mae Reports Net Income of $4.2 Billion for Third Quarter 2026
• Positive Sentiment: Higher interest rates helped net interest income. The quarterly increase in net income and revenue was supported by stronger net interest income and net fair-value gains, suggesting improved earnings generation despite challenging mortgage-market conditions. Fannie Mae Q3 Net Income and Revenue Rise
• Neutral Sentiment: Updated AI and cybersecurity requirements indicate continued investment in risk management and technology controls. The changes may strengthen operational resilience, although they could also increase compliance requirements for counterparties and technology users. Fannie Mae Posts Updates to AI and Cybersecurity Requirements
• Negative Sentiment: B. Riley lowered its Fannie Mae price target to $4.50 from $7. The reduction signals weaker near-term analyst confidence and leaves limited implied upside from recent trading levels. Fannie Mae Price Target Lowered at B. Riley
• Negative Sentiment: Credit risk remains a concern. Provision for credit losses rose to $1.1 billion from $485 million in the second quarter. Separate housing coverage warned that landlords face substantial refinancing and debt risks, potentially weighing on mortgage-credit quality. Fannie Mae and Freddie Mac Housing Warning
• Negative Sentiment: Analyst sentiment remains cautious: Wall Street coverage rated the stock “Reduce,” reinforcing concerns about valuation, profitability quality, and the unresolved government-conservatorship exit. Fannie Mae Stock Rated Reduce

Analysts Set New Price Targets

Several brokerages recently issued reports on FNMA. B. Riley Financial restated a "neutral" rating on shares of Fannie Mae in a research report on Thursday. Mizuho set a $5.00 price objective on Fannie Mae and gave the stock a "neutral" rating in a research note on Monday, October 12th. Keefe, Bruyette & Woods reduced their price objective on Fannie Mae from $6.25 to $3.50 and set an "underperform" rating for the company in a research note on Monday, September 28th. Finally, Wedbush assumed coverage on Fannie Mae in a report on Thursday, October 22nd. They issued a "hold" rating and a $3.50 target price on the stock. Five analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Reduce" and a consensus target price of $7.80.

Institutional Investors Weigh In On Fannie Mae

A hedge fund recently bought a new position in Fannie Mae stock. Ratan Capital Management LP acquired a new position in shares of Fannie Mae (OTCMKTS:FNMA - Free Report) in the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund acquired 79,000 shares of the financial services provider's stock, valued at approximately $514,000. Institutional investors and hedge funds own 0.02% of the company's stock.

Fannie Mae Trading Up 11.1%

The firm has a 50-day moving average of $4.90 and a two-hundred day moving average of $6.53. The firm has a market cap of $5.34 billion, a price-to-earnings ratio of 115.28 and a beta of 1.68.

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.

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