Fannie Mae (OTCMKTS:FNMA) Stock Jumps 13.3% - Here's What Happened

Key Points

• Fannie Mae shares jumped 13.3% to $3.57, reaching as high as $3.63, with trading volume 45% above its average.
• Despite the rally, analyst sentiment remains cautious: five analysts rate the stock Hold and one rates it Sell, producing an overall “Reduce” rating; Keefe, Bruyette & Woods also cut its target to $3.50.
• The company’s latest quarterly results exceeded expectations, reporting $0.68 in earnings per share versus a $0.63 estimate and $7.57 billion in revenue versus $7.32 billion expected.

Fannie Mae (OTCMKTS:FNMA - Get Free Report) was up 13.3% during trading on Thursday. The stock traded as high as $3.63 and last traded at $3.57. 7,533,509 shares changed hands during trading, an increase of 45% from the average daily volume of 5,186,478 shares. The stock had previously closed at $3.15.

Analyst Ratings Changes

A number of research analysts recently weighed in on the company. Keefe, Bruyette & Woods decreased their target price on Fannie Mae from $6.25 to $3.50 and set an "underperform" rating on the stock in a report on Monday, September 28th. B. Riley Financial cut their price target on Fannie Mae from $8.00 to $7.00 and set a "neutral" rating for the company in a report on Thursday, July 30th. Wedbush reaffirmed a "neutral" rating and set a $8.00 price target on shares of Fannie Mae in a report on Thursday, July 30th. Finally, Mizuho set a $5.00 price objective on shares of Fannie Mae and gave the stock a "neutral" rating in a research report on Monday. Five research 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 stock currently has an average rating of "Reduce" and a consensus target price of $8.70.

Fannie Mae Price Performance

The company has a market cap of $4.13 billion, a price-to-earnings ratio of 89.27 and a beta of 1.68. The firm has a 50-day moving average price of $5.34 and a 200 day moving average price of $6.32.

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 for the quarter, topping the consensus estimate of $0.63 by $0.05. The business had revenue of $7.57 billion during the quarter, compared to analysts' expectations of $7.32 billion. Fannie Mae had a negative return on equity of 76.66% and a net margin of 4.59%. On average, equities analysts anticipate that Fannie Mae will post 2.63 EPS for the current fiscal year.

Institutional Investors Weigh In On Fannie Mae

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

Fannie Mae Company Profile

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 eligible residential mortgage loans from approved lenders and providing liquidity that helps banks and other mortgage originators continue making loans to homebuyers and homeowners.

Fannie Mae primarily supports single-family and multifamily housing. It finances and securitizes qualifying mortgage loans into mortgage-backed securities and generally guarantees the timely payment of principal and interest to investors in those securities.

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