Keefe, Bruyette & Woods Upgrades Freddie Mac (FMCC) to Outperform

Keefe, Bruyette & Woods analyst Bose T. George upgraded Freddie Mac (OTC: FMCC) from Market Perform to Outperform with a price target of $2.50.

The analyst commented, "We are upgrading shares of FNMA and FMCC to Outperform, following our recent upgrade to Market Perform. While the longer-term outlook for GSE privatization remains uncertain, we believe that the shares are positioned to outperform over the summer given the likelihood of a closely contested presidential election. During the Trump administration, both common and preferred shares of Fannie and Freddie traded as much as 3x higher than they are trading today, so in the event of a close election we would expect material upside from current levels as the market builds in the possibility of a change at the White House. We are also raising our price targets to $2.00 for FNMA and $2.50 for FMCC (up from $1.25 for both). Our price targets are based on the present value of normalized earnings and assume that the government converts its senior preferred shares to common. Our higher targets are based on more favorable assumptions, including a higher conversion price for Treasury senior preferred shares."

For an analyst ratings summary and ratings history on Freddie Mac click here. For more ratings news on Freddie Mac click here.

Shares of Freddie Mac closed at $1.07 yesterday.

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