Mizuho Slashes Fannie, Freddie Targets as Privatization Odds Fade
FNMA is trading near its 52-week low of $3.3 (4.8% above the low) on elevated volume (2.0× avg).
Summary
Mizuho downgraded both Fannie Mae and Freddie Mac and cut price targets by at least half — FNMA to $5 from $10, FMCC to $4 from $9 — citing higher mortgage rates, FHFA head Bill Pulte's stance on balance-sheet mortgage purchases, and credit scoring changes. The analysts cut their probability of a fast exit from conservatorship by 2028 to 18% for FNMA and 9% for FMCC. Shares fell 12.7% and 13% respectively shortly after the open, with FNMA on track for its lowest close since January 2025. This follows Michael Burry's Sunday blog post warning the stocks could become worthless. The downgrade directly attacks the core investment thesis — privatization — and the price action confirms traders are repricing that risk.
At the time of this announcement, FNMA was trading at $3.46 on OTC in the Finance sector, with a market capitalization of approximately $4B. The 52-week trading range was $3.30 to $12.87. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.