FNMA, FMCC Head For September Slump As Analyst Cuts Targets On Privatization Doubts: Retail’s Losing Faith Too

• While the brokerage still expects "robust earnings" from the company, it remains cautious on the outlook for the common shares. 
• Keefe said it sees a growing likelihood that the company will not be privatized. 
• The analyst added that even if privatization occurs, the common shares will be diluted as the senior preferred shares are converted to common shares. 

Fannie Mae (FNMA) shares are down more than 23% in September, on track for their worst month this year, while Freddie Mac (FMCC) shares have fallen more than 25% over the same period, their worst decline since January. 

Late on Sunday, Keefe, Bruyette & Woods cut its price target on Fannie Mae by 44% to $3.50 from $6.25, according to The Fly. The new target implies about 25% downside from Fannie Mae's last close.

FNMA Stock: Target Cut Rationale

The brokerage also lowered its Freddie Mac target to $3.50 from $6.50, implying about 16% downside, and kept underperform ratings on both stocks.

Keefe said it still expects "robust earnings" from both companies but remains cautious on the common shares. The firm sees a growing likelihood that privatization will not happen.

Even if it does, common shareholders would be diluted when the senior preferred shares held by the Treasury Department are converted to common stock, the firm said. 

Trump’s Privatization Efforts 

In 2025, the Trump administration revived efforts to privatize Fannie Mae and Freddie Mac, aiming to end their government conservatorships by potentially raising capital through public share offerings. 

The government’s rationale is to return the mortgage giants to private ownership while preserving their role in the U.S. housing-finance system, improve housing affordability, and lower mortgage costs. 

While the plan still remains under consideration, there is no finalized timeline. Earlier in June, U.S. President Donald Trump had said that an IPO was still on the table, despite uncertainty. 

FNMA Stock: Retail Stance

On Stocktwits, retail sentiment around FNMA stock was ‘bearish’ at the time of writing. 

Meanwhile, retail sentiment around FMCC stock was also ‘bearish.’

One user said, “$FNMA $FMCC lets enjoy this ride down as we pick up more shares and enjoy the ride up dropping them off!!!!”

FNMA stock has declined more than 57% in 2026 amid a constrained mortgage market, while FMCC stock has fallen nearly 60% in the same time. 

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