Zacks Investment Research has downgraded the stock of Fannie Mae from a “hold” to a “strong sell.”
Despite the downgrade, the GSE’s stock has gained slightly this week. It opened at $10.85 on Monday, and was at $11.00 at the market close today.
The firm has a 50-day moving average price of $12.19 and a 200-day moving average price of $10.51. The firm has a market capitalization of $12.57 billion, a PE ratio of 16.18 and a beta of 2.04. Fannie Mae has a 12-month low of $1.34 and a 12-month high of $15.99, according to MarketBeat.
The downgrade came as the GSE is going through restructuring and leadership changes. Late last month, CEO Priscilla Almodovar stepped down from her position, with Peter Akwaboah assuming the role of interim CEO. Just one week later, the company implemented workforce reductions affecting more than 62 employees across multiple departments, including information technology and diversity initiatives.
While the third-quarter earnings report released October 29 showed increases in profits and revenue, but earnings per share was $0.00.
Commenting when the quarterly report was released, Timothy D’Agostino, Equity Research Analyst for B. Riley Securities, said the outlook for the GSE is promising. “We forecast EPS, before senior preferred adjustments, of $2.50, $2.70, and $2.85 for 2025, 2026, and 2027, respectively. The key drivers to our forecast include portfolio growth of –0.8%, 3.5%, and 3.8% in 2025, 2026, and 2027, respectively, and delinquency rates remaining stable at about 0.5% in 2025, 2026, and 2027.”
The organizational structure of the GSE remains in question. It has remained under federal conservatorship since the 2008 financial crisis, but recent discussions suggest this arrangement might eventually change. Market observers are increasingly focused on the possibility of privatization through what could become one of the largest initial public offerings in financial history.
