Ackman Expects Trump to Boost Fannie and Freddie Stocks

Billionaire investor Bill Ackman believes President-elect Trump can significantly influence Fannie Mae and Freddie Mac stocks, which have soared over the past year. Shares of both government-sponsored enterprises are poised for potential gains if conservatorship ends.

Date: 18-01-2025

AI Rating: 8

Earnings Performance and Potential Gains: The report highlights the remarkable stock performance of Fannie Mae and Freddie Mac, which saw gains of over 540% and nearly 600% respectively within the last year. This surge indicates a strong recovery from their previous dismal performance, where both stocks declined more than 65% between 2020 and 2023.

Future Outlook: Ackman suggests that under a second Trump administration, federal conservatorship that has enveloped these GSEs since 2008 could conclude, potentially resulting in an IPO around $34 per share by 2026. This would signify substantial growth, reflecting Ackman's belief in the potential for substantial profits for the government, estimated at over $300 billion.

Overall, the report stresses a favorable outlook for these companies, contingent upon legislative support and the administration's willingness to pursue these actions.

Stocks: FNMA FMCC