Fannie Mae (OTCMKTS:FNMA) Announces Quarterly Earnings Results

Fannie Mae (OTCMKTS:FNMA) announced its quarterly earnings results on Wednesday. The financial services provider reported $0.72 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.66 by $0.06, Zacks reports. Fannie Mae had a negative return on equity of 82.92% and a net margin of 5.16%. The business had revenue of $7.65 billion for the quarter, compared to the consensus estimate of $7.45 billion.

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

• Net income rose to $4.2 billion in the third quarter, up 5% sequentially and 8% year over year, while net worth grew to more than $119 billion. Net revenues reached $7.7 billion, supported by the stable guaranty business.
• Fannie Mae reported continued progress on financial efficiency, including a $27 million quarter-over-quarter reduction in administrative expenses and a 47-basis-point improvement in its expense ratio. The company also expanded its retained mortgage portfolio and increased net interest margin to 69.2 basis points year to date.
• Credit risk increased as the company recorded a $1.1 billion combined provision for single-family and multifamily credit losses, driven by higher interest rates, weakening multifamily metrics, and lower property-value forecasts. Both single-family and multifamily serious delinquency rates rose to 62 basis points.
• Elevated mortgage rates pressured refinancing, single-family acquisitions, multifamily volumes, property values, and affordability. Fannie Mae said it expects ongoing multifamily market challenges to produce additional delinquencies if conditions persist.

Fannie Mae Stock Up 0.2%

Shares of OTCMKTS FNMA traded up $0.01 during trading on Friday, hitting $4.58. The company had a trading volume of 783,404 shares, compared to its average volume of 5,316,263. The stock has a fifty day simple moving average of $4.86 and a two-hundred day simple moving average of $6.49. Fannie Mae has a fifty-two week low of $2.96 and a fifty-two week high of $12.39. The firm has a market capitalization of $5.30 billion, a price-to-earnings ratio of 20.82 and a beta of 1.68.

Analyst Ratings Changes

Several equities research analysts have weighed in on the company. Keefe, Bruyette & Woods lowered their price target on Fannie Mae from $6.25 to $3.50 and set an “underperform” rating for the company in a report on Monday, September 28th. Mizuho downgraded shares of Fannie Mae from an “outperform” rating to a “neutral” rating and set a $5.00 price objective on the stock. in a report on Monday, October 12th. B. Riley Financial cut their price objective on shares of Fannie Mae from $7.00 to $4.50 and set a “neutral” rating on the stock in a report on Thursday. Finally, Wedbush started coverage on shares of Fannie Mae in a research report on Thursday, October 22nd. They issued a “hold” rating and a $3.50 price objective for the company. Five research analysts have rated the stock with a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Reduce” and a consensus target price of $7.30.

About Fannie Mae

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 qualifying residential mortgage loans from approved lenders and helping provide liquidity so those lenders can continue offering mortgage financing to homebuyers and homeowners.

Fannie Mae finances its activities primarily by issuing debt and mortgage-backed securities. It also guarantees certain mortgage-backed securities, helping connect mortgage lenders with institutional investors.