Fannie Mae stock soars 51% after Bill Ackman calls it 'stupidly cheap'
Fannie Mae's stock surged by over 50% in a single day after billionaire investor Bill Ackman called the company 'stupidly cheap'. The sharp rise followed months of decline, with shares down 34% since the start of the year. Analysts now see potential for further gains, despite mixed performance in recent quarters. On March 30, Fannie Mae's share price jumped 51.2% intraday. The rally came after Ackman, founder of Pershing Square Holdings, praised the stock's value on social media. His firm holds nearly 10% of the outstanding shares in both Fannie Mae and Freddie Mac, reinforcing his influence in the market.
The stock's 14-day relative strength index (RSI) rose to 56.95, signalling strong bullish momentum. Yet, over the past year, gains have been modest—just 7.27%. The share price remains 55.7% below its 52-week high, reflecting waning enthusiasm for privatisation plans. Wall Street analysts currently rate Fannie Mae a 'Moderate Buy,' with an average price target of $13.30. This suggests an 87.9% upside from its current level. The company's forward-adjusted price-to-sales ratio sits at 1.43 times, well below the industry average of 2.72 times. Financial results for Q4 2025 showed flat net revenues of $7.33 billion, unchanged from the previous year. Meanwhile, fellow investor Michael Burry—famous for predicting the 2008 housing crash—publicly supported Ackman's optimistic stance on Fannie Mae. No clear policy shifts on privatisation have emerged from the current US administration. While former President Trump's potential 2026 nomination of Kevin Warsh as Fed chair could shape financial regulation, no direct link to Fannie Mae's future has been established.
Fannie Mae's stock now trades at a discount compared to industry peers, despite recent volatility. Ackman's endorsement and strong analyst ratings have boosted short-term confidence. However, the company's long-term outlook still hinges on broader market conditions and regulatory developments.
