Fannie Mae upgraded to Outperform from Market Perform at Keefe Bruyette

Keefe Bruyette analyst Bose George upgraded Fannie Mae to Outperform from Market Perform with a price target of $2, up from $1.25. While the longer-term outlook for government-sponsored enterprise privatization remains uncertain, the shares are positioned to outperform over the summer given the likelihood of a closely contested presidential election, the analyst tells investors in a research note. The firm says that during the Trump administration, both common and preferred shares of Fannie and Freddie traded as much as three-times higher than they are trading today. In the event of a close election, there is material upside from current share levels as the market builds in the possibility of a change at the White House, contends Keefe. The firm says its higher targets are also based on more favorable assumptions, including a higher conversion price for Treasury senior preferred shares.