STOCKS | Mizuho Analyst Sees Potential for Fannie Mae and Freddie Mac to Relist

On May 8, Mizuho Securities analyst Dan Dolev expressed that investors might be underestimating the potential for mortgage giants Fannie Mae and Freddie Mac to relist. According to Jin10, Dolev initiated coverage of the two companies this week, assigning a 'buy' rating. His base case scenario suggests a 30% probability for Fannie Mae to exit government conservatorship by 2028, while Freddie Mac has a 20% chance. He noted that with the easing of the U.S.-Iran war situation, the Trump administration might prioritize returning these companies to the public market. "The market assigns too low a probability for them to relist by 2028. We believe the probability is slightly higher," Dolev stated. The expectation of ending the 17-year government control had previously driven their stock prices significantly higher between 2024 and 2025. However, since the beginning of the year, due to a lack of clarity in government plans, their stock prices have sharply declined, with Fannie Mae and Freddie Mac's OTC stock prices nearly halving from their September highs. Dolev set a target price of $10 for Fannie Mae, approximately 25% above the latest closing price, and a target price of $9 for Freddie Mac, about 26% higher than the latest closing price.