Fannie Mae (OTCMKTS:FNMA) Shares Gap Up - Should You Buy?

Key Points

• Fannie Mae shares opened sharply higher, rising from a prior close of $4.91 to $5.42 before trading near $4.99 on volume of 318,941 shares.
• Analyst sentiment remains cautious: the stock has a consensus “Hold” rating, with one Strong Buy, four Holds, and one Sell; the average price target is $10.70, while B. Riley lowered its target to $7.00.
• Fannie Mae exceeded quarterly expectations, reporting $0.68 EPS and $7.57 billion in revenue versus estimates of $0.63 EPS and $7.32 billion, though its negative 76.66% return on equity and limited institutional ownership highlight ongoing risks.

Fannie Mae (OTCMKTS:FNMA - Get Free Report) gapped up prior to trading on Thursday . The stock had previously closed at $4.91, but opened at $5.42. Fannie Mae shares last traded at $4.9880, with a volume of 318,941 shares changing hands.

Wall Street Analyst Weigh In

A number of research firms recently issued reports on FNMA. B. Riley Financial reduced their price objective on Fannie Mae from $8.00 to $7.00 and set a "neutral" rating for the company in a research report on Thursday, July 30th. BTIG Research downgraded shares of Fannie Mae from a "buy" rating to a "neutral" rating in a research report on Tuesday, June 16th. Finally, Wedbush reiterated a "neutral" rating and set a $8.00 price objective on shares of Fannie Mae in a research note on Thursday, July 30th. One equities research analyst has rated the stock with a Strong Buy rating, four have issued a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock has a consensus rating of "Hold" and an average target price of $10.70.

Fannie Mae Stock Performance

The stock has a 50-day moving average of $6.02 and a two-hundred day moving average of $6.55. The firm has a market cap of $5.69 billion, a price-to-earnings ratio of 122.78 and a beta of 1.70.

Fannie Mae (OTCMKTS:FNMA - Get Free Report) last released its quarterly earnings results on Wednesday, July 29th. The financial services provider reported $0.68 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.63 by $0.05. Fannie Mae had a net margin of 4.59% and a negative return on equity of 76.66%. The business had revenue of $7.57 billion for the quarter, compared to analyst estimates of $7.32 billion. Sell-side analysts expect that Fannie Mae will post 2.63 EPS for the current fiscal year.

Institutional Inflows and Outflows

An institutional investor recently bought a new position in Fannie Mae stock. Hennessy Advisors Inc. purchased a new stake in shares of Fannie Mae (OTCMKTS:FNMA - Free Report) during the 2nd quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund purchased 30,000 shares of the financial services provider's stock, valued at approximately $195,000. 0.02% of the stock is owned by institutional investors.

Fannie Mae Company Profile

Fannie Mae, formally known as the Federal National Mortgage Association, is a government-sponsored enterprise that supports liquidity and stability in the U.S. housing finance system. The company does not generally lend directly to homebuyers. Instead, it purchases qualifying residential mortgages from approved lenders, providing those institutions with funds to originate additional loans.

Fannie Mae finances its activities primarily by issuing debt and mortgage-backed securities. It also guarantees the timely payment of principal and interest on many mortgage-backed securities backed by the loans it purchases.

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