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

Fannie Mae (OTCMKTS:FNMA) announced its earnings results on Wednesday. The financial services provider reported $0.68 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.63 by $0.05, Zacks reports. Fannie Mae had a net margin of 4.53% and a negative return on equity of 65.94%.

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 Price Performance

Fannie Mae stock traded down $0.11 during trading hours on Wednesday, reaching $6.00. The company had a trading volume of 2,086,355 shares, compared to its average volume of 5,750,028. Fannie Mae has a 12-month low of $3.60 and a 12-month high of $15.99. The company has a 50-day moving average price of $6.51 and a 200 day moving average price of $7.21. The firm has a market cap of $6.95 billion, a price-to-earnings ratio of 600.60 and a beta of 1.62.

Analyst Ratings Changes

A number of analysts have recently issued reports on FNMA shares. Wedbush downgraded shares of Fannie Mae from an “outperform” rating to a “neutral” rating and set a $8.00 price objective for the company. in a report on Friday, May 1st. Mizuho initiated coverage on Fannie Mae in a research report on Monday, May 4th. They set an “outperform” rating and a $10.00 price target on the stock. BTIG Research lowered Fannie Mae from a “buy” rating to a “neutral” rating in a research note on Tuesday, June 16th. Keefe, Bruyette & Woods cut their price objective on Fannie Mae from $10.00 to $8.50 and set an “underperform” rating for the company in a report on Monday, April 20th. Finally, Zacks Research upgraded Fannie Mae from a “strong sell” rating to a “hold” rating in a report on Tuesday, April 21st. One investment analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the company currently has a consensus rating of “Hold” and a consensus target price of $12.75.

About Fannie Mae

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.