Fannie Mae (OTCMKTS:FNMA) Shares Down 23.2% - Should You Sell?

Key Points

• Fannie Mae shares fell 23.2% in Wednesday trading, dropping from a previous close of $5.56 to $4.27; trading volume was 38% below its daily average.
• Analyst sentiment was cautious: five analysts rated the stock Hold and one Sell, while recent firms cut price targets. MarketBeat reported an average rating of “Reduce” and an average target of $7.30.
• Fannie Mae beat quarterly expectations, reporting earnings of $0.72 per share versus $0.66 forecast and revenue of $7.65 billion versus $7.45 billion expected.

Fannie Mae (OTCMKTS:FNMA - Get Free Report) shares were down 23.2% during trading on Wednesday. The company traded as low as $4.10 and last traded at $4.27. 3,289,809 shares changed hands during mid-day trading, a decline of 38% from the average daily volume of 5,336,530 shares. The stock had previously closed at $5.56.

Wall Street Analyst Weigh In

FNMA has been the topic of several research analyst reports. Keefe, Bruyette & Woods cut their target price on shares of Fannie Mae from $6.25 to $3.50 and set an "underperform" rating on the stock in a research note on Monday, September 28th. B. Riley Financial dropped their price target on shares of Fannie Mae from $7.00 to $4.50 and set a "neutral" rating for the company in a research report on Thursday, October 29th. Wedbush started coverage on shares of Fannie Mae in a report on Thursday, October 22nd. They set a "hold" rating and a $3.50 target price for the company. Finally, Mizuho lowered Fannie Mae from an "outperform" rating to a "neutral" rating and set a $5.00 target price for the company. in a research report on Monday, October 12th. Five analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Reduce" and an average price target of $7.30.

Fannie Mae Stock Down 12.4%

The business's 50 day moving average is $4.79 and its 200 day moving average is $6.41. The company has a market cap of $5.64 billion, a P/E ratio of 22.14 and a beta of 1.72.

Fannie Mae (OTCMKTS:FNMA - Get Free Report) last issued its quarterly earnings results on Wednesday, October 28th. The financial services provider reported $0.72 earnings per share for the quarter, topping analysts' consensus estimates of $0.66 by $0.06. The business had revenue of $7.65 billion for the quarter, compared to analyst estimates of $7.45 billion. Fannie Mae had a negative return on equity of 88.54% and a net margin of 5.16%. As a group, equities research analysts forecast that Fannie Mae will post 2.71 EPS for the current year.

Institutional Investors Weigh In On Fannie Mae

An institutional investor recently bought a new position in Fannie Mae stock. Hennessy Advisors Inc. acquired a new stake in Fannie Mae (OTCMKTS:FNMA - Free Report) during the second quarter, according to its most recent Form 13F filing with the SEC. The institutional investor acquired 30,000 shares of the financial services provider's stock, valued at approximately $195,000. 0.02% of the stock is currently owned by institutional investors.

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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