Fannie Mae (OTCMKTS:FNMA) Posts Earnings Results, Beats Expectations By $0.05 EPS

Fannie Mae (OTCMKTS:FNMA) posted its quarterly earnings results on Wednesday. The financial services provider reported $0.68 EPS for the quarter, topping the consensus estimate of $0.63 by $0.05, Zacks reports. The business had revenue of $7.57 billion during the quarter, compared to analysts’ expectations of $7.32 billion. Fannie Mae had a net margin of 4.59% and a negative return on equity of 76.66%.

Here are the key takeaways from Fannie Mae’s conference call:

• Strong quarterly performance: Net income rose 7% quarter-over-quarter and 20% year-over-year to $4.0 billion, while net revenues increased 4% to $7.6 billion. The company said its $4.1 trillion guaranty book and disciplined expense management supported results.
• Net worth surpassed $116 billion, further reducing Fannie Mae’s regulatory capital deficit and strengthening its ability to provide housing-market liquidity. The company supplied $125 billion in second-quarter liquidity, supporting approximately 417,000 households.
• Cost efficiency continued to improve: Non-interest expense declined 5% quarter-over-quarter and 11% year-over-year, while the administrative expense ratio remained below 11%. Management also cited technology and AI investments as potential longer-term productivity drivers.
• Credit costs increased, particularly in multifamily. The total allowance rose $161 million, including a $102 million multifamily increase driven by weaker property valuations, slower net operating income growth, and newly serious delinquencies; management expects multifamily market challenges to produce additional delinquencies.
• Interest-rate risk management affected comprehensive income: Fannie Mae increased longer-term rate exposure, including U.S. Treasury securities, and recorded $150 million in net unrealized losses on its available-for-sale portfolio due to higher long-term rates.

Fannie Mae Trading Up 0.7%

FNMA stock opened at $6.00 on Friday. Fannie Mae has a 1 year low of $3.60 and a 1 year high of $15.99. The company has a fifty day simple moving average of $6.47 and a 200 day simple moving average of $7.14. The firm has a market cap of $6.95 billion, a PE ratio of 150.04 and a beta of 1.62.

Analyst Ratings Changes

A number of equities research analysts have issued reports on the stock. BTIG Research lowered shares of Fannie Mae from a “buy” rating to a “neutral” rating in a research note on Tuesday, June 16th. B. Riley Financial cut their price objective on Fannie Mae from $8.00 to $7.00 and set a “neutral” rating for the company in a report on Thursday. Wedbush reissued a “neutral” rating and set a $8.00 price objective on shares of Fannie Mae in a research report on Thursday. Keefe, Bruyette & Woods lowered their target price on Fannie Mae from $10.00 to $8.50 and set an “underperform” rating on the stock in a research note on Monday, April 20th. Finally, Zacks Research raised Fannie Mae from a “strong sell” rating to a “hold” rating in a research report on Tuesday, April 21st. One analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating, four have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Hold” and a consensus target price of $12.25.

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.