By Shaina Mishkin
A public offering of Freddie Mac and Fannie Mae shares is on the political back-burner, a Wedbush analyst wrote in a Friday note. That doesn't mean the shares are a bad buy.
Analyst Henry Coffey reduced his 12-month price targets for Fannie Mae stock to $8 from $13 and Freddie Mac to $12 from $13.35. He maintained his Outperform rating.
Their shares already trade on OTC Markets, but buzz around the potential for an additional offering, along with hopes for an eventual exit from their long-running government conservatorship, drove prices in September to their highest levels since 2008.
Those gains have since waned as news has been sparse: Fannie Mae stock is down 44% this year through Thursday's close, while Freddie Mac is 48% lower, according to Dow Jones Market Data.
Investors shouldn't expect word on the Trump administration's plans for the companies any time soon, Coffey wrote.
"With President Trump clearly focused elsewhere and other members of the Administration unusually silent around the Fannie Mae (FNMA) / Freddie Mac (FMCC) 'IPO,' the only discussion we are expecting from the Administration regarding these two until after the midterms, if at all, is around the issue of lowering mortgage cost for residential borrowers, " Coffey wrote.
The White House, the Federal Housing Finance Agency, the Treasury Department, Fannie Mae, and Freddie Mac didn't respond to a request for comment. The administration's two housing-related executive orders signed on Friday didn't mention plans for Fannie Mae and Freddie Mac's conservatorship or an eventual offering.
The Trump administration was widely expected to remove Fannie Mae and Freddie Mac out of conservatorship in the president's second term. The conservatorship is overseen by the Federal Housing Finance Agency and linked to an agreement with the Treasury. The president alluded to a potential share offering on Truth Social in 2025.
But no such public offering has come to fruition, and the first quarter of 2026 has come and gone with little executive acknowledgment of the company -- with one exception.
The president said he was instructing Fannie Mae and Freddie Mac to buy mortgage bonds earlier this year. That lowered mortgage rates but spooked investors, who perceived the move as a sign the administration would maintain government control to lower mortgage rates.
There is still value in the shares, Coffey wrote -- even if there are probably dozens of options for the companies' path forward.
"The primary risk factors facing these two rests principally with the uncertainty over what course the Administration ultimately takes, when it is likely to move forward and what value it places on the [senior preferred shares]," Coffey wrote.
The treatment of the Treasury's stake in the companies, which is a mechanism of its conservatorship, is one of the key questions about their future.
Coffey's price targets are based on a blended analysis of different paths for the companies. He rates an approach in which the companies retain their earnings for several years before paying a dividend on the Treasury's senior preferred shares as the most likely outcome.
That is neither the worst-case scenario for shareholders nor the best, he notes.
"Nobody we talk with is against getting [Fannie Mae and Freddie Mac] out of conservatorship and moving mortgage risk back into the private sector, " he wrote. "No one except stock traders want this to occur on terms that do anything to hamper mortgage cost or availability."
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 13, 2026 17:30 ET (21:30 GMT)
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