Fannie Mae (OTCMKTS:FNMA) Shares Gap Down – Should You Sell?

Fannie Mae (OTCMKTS:FNMA) gapped down before the market opened on Friday . The stock had previously closed at $4.88, but opened at $4.25. Fannie Mae shares last traded at $5.3760, with a volume of 5,053,458 shares.

Fannie Mae News Roundup

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

• Positive Sentiment: FHFA loosened condo and rural-loan insurance rules that permit more flexible roof coverage and lower insurance hurdles, which should reduce borrower costs and expand the pool of loans eligible for purchase by the GSEs — a structural benefit for Fannie Mae’s origination business. Read More.
• Neutral Sentiment: Industry commentary frames the insurance updates as fixing real frictions (condo and roof coverage) and lowering homeowner costs, but the near-term boost to Fannie’s earnings is uncertain pending implementation details and timing. Read More.
• Negative Sentiment: Investor confidence is dented by growing uncertainty around privatization plans; unclear policy direction reduced expectations for shareholder upside and contributed to heavy selling pressure in Fannie and Freddie shares. Read More.
• Negative Sentiment: Broader market headwinds — a significant drop in mortgage applications, higher interest rates, and institutional rebalancing — are cited as key drivers of the stock’s slide this week, limiting near-term originations and investor appetite for FNMA. Read More.

Wall Street Analysts Forecast Growth

A number of research firms have recently issued reports on FNMA. BTIG Research began coverage on Fannie Mae in a report on Monday, January 26th. They issued a “buy” rating and a $20.00 target price for the company. Zacks Research lowered Fannie Mae from a “hold” rating to a “strong sell” rating in a research report on Wednesday, February 11th. Wedbush assumed coverage on Fannie Mae in a research note on Tuesday, November 25th. They issued an “outperform” rating and a $11.50 price objective for the company. Finally, B. Riley Financial restated a “neutral” rating on shares of Fannie Mae in a research report on Thursday, February 12th. One equities research analyst has rated the stock with a Strong Buy rating, two have issued a Buy rating, one has given a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $14.30.

Fannie Mae Trading Up 2.9%

The company has a market cap of $5.82 billion, a PE ratio of 1.90 and a beta of 1.78. The business’s 50-day simple moving average is $7.81 and its 200-day simple moving average is $10.18.

Fannie Mae (OTCMKTS:FNMA) last posted its quarterly earnings results on Wednesday, February 11th. The financial services provider reported $0.60 EPS for the quarter, missing the consensus estimate of $0.68 by ($0.08). Fannie Mae had a net margin of 2.22% and a negative return on equity of 49.21%. The company had revenue of $7.33 billion for the quarter, compared to analysts’ expectations of $7.33 billion.

Fannie Mae Company Profile

The Federal National Mortgage Association, commonly known as Fannie Mae (OTCMKTS:FNMA), is a government-sponsored enterprise established by Congress in 1938 as part of the New Deal to support the U.S. housing market. Headquartered in Washington, DC, Fannie Mae’s mission is to promote liquidity, stability and affordability in the mortgage market. The company operates by purchasing residential mortgage loans from financial institutions, pooling them into mortgage-backed securities (MBS), and providing guarantees to investors against borrower default.

In its core business, Fannie Mae works with mortgage lenders across the United States—including banks, credit unions and mortgage finance companies—to ensure a steady flow of capital for homebuyers and homeowners seeking refinancing.