Common equity in the two government-backed mortgage financiers moved lower on Friday morning after Wedbush analyst Henry Coffey reduced his price targets for both Fannie Mae and Freddie Mac, citing a lessened near-term likelihood that the companies will be released from government conservatorship.
Coffey trimmed his target for Fannie Mae to $8, down from $13, and lowered his Freddie Mac target to $12 from $13.35.
In a note explaining the changes, Coffey wrote: "With President Trump clearly focused elsewhere and other members of the administration unusually silent around the Fannie Mae/Freddie Mac '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."
The analyst said his updated valuations reflect three policy scenarios he considers most relevant given the heightened attention to housing affordability. Those scenarios are:
- Doing nothing - under which Coffey suggested a $0.00 value for both common shares.
- Building capital and then paying dividends on senior and junior preferred shares seven to 10 years in the future.
- Deeming senior preferred shares paid and converting both senior and junior preferred shares into common stock.
Market reactions were visible on Friday. Fannie Mae shares dropped as much as 3.2% during the session, while Freddie Mac fell by as much as 2.6%.
Both names have seen significant declines from earlier peaks, with each down more than 60% since a Sept. 11 high. Optimism earlier in the year about potential initial public offerings had been a key driver of gains for the two mortgage-finance firms in 2025.
Readers should note that an analyst’s change in price targets reflects an updated view of policy timelines and possible restructuring outcomes rather than an operational change at the companies themselves. The immediate market response illustrates sensitivity to political developments and timing around any potential exit from conservatorship.