Fannie Mae Shares Surge as Analyst Forecasts Dramatic Turnaround

A seismic shift is underway for Fannie Mae (FNMA) as a prominent Wall Street firm delivers a stunningly optimistic reassessment of the government-sponsored enterprise. Wedbush Securities has jolted the market with a rare double-upgrade, catapulting the long-dormant stock back into the spotlight and fueling speculation that its years in regulatory limbo may be concluding.

The source of today's market excitement is analyst Henry Coffey. In a decisive move, he has elevated the firm's rating directly from "Underperform" to "Outperform," bypassing any intermediate steps. The adjustment to the price target is even more dramatic, leaping from a pessimistic $1.00 to a robust $11.50 per share.

This radical change in sentiment stems from a growing conviction that the Trump administration and the Federal Housing Finance Agency (FHFA) are preparing to take concrete action. The stated goal is to release Fannie Mae and its counterpart from the conservatorship that has controlled them since the 2008 financial crisis. Coffey's analysis outlines a viable path for the Treasury Department to monetize its substantial investments in the entity.

Key factors driving the renewed bullish outlook include:

• Substantial Appreciation Potential: The new $11.50 target indicates significant upside from the current trading level near $9.50.
• Mounting Political Momentum: The administration is reportedly exploring methods to liquidate the government's stake.
• A Tentative Timeline: FHFA Director Bill Pulte has suggested a potential sale of a 5% government-held stake could occur as early as December 2025 or the beginning of 2026.

This evolving scenario fundamentally alters the risk-reward profile for investors, many of whom have waited years for a resolution.

Should investors sell immediately? Or is it worth buying Fannie Mae?

Regulatory Shifts Unlock Operational Growth

Beyond the privatization narrative, the company received tangible operational news. The overseeing FHFA announced significant increases to its loan purchase limits for 2026, signaling a clear intent to stimulate growth in the housing finance sector.

The cap for multifamily loan acquisitions for 2026 has been set at $88 billion, representing a solid 20% increase compared to the 2025 level. Concurrently, the conforming loan limit for single-family homes will rise by 3.3% to $832,750. These adjustments effectively permit Fannie Mae to deploy more capital and expand its addressable market for guarantee fees.

A Decade-Long Stalemate Nearing Its End?

The Wedbush upgrade marks a potential historic inflection point. For over a decade, Fannie Mae's shares have been traded primarily as a speculative bet on privatization, constantly weighed down by legal challenges and fears of shareholder dilution through mechanisms like the Net Worth Sweep. The previous $1.00 price target reflected the pessimistic outcome where these risks materialized.

The jump to $11.50 turns this logic on its head, suggesting that analysts now believe current shareholders will retain meaningful value. The personnel and policy direction of the new administration appear aligned with the objective of returning Fannie Mae and Freddie Mac to the private markets.

All eyes are now fixed on the potential developments in December. Should the Treasury confirm the sale of an initial stock tranche, it would mark the first definitive step toward ending the conservatorship that began in 2008. With the share price testing the $10.00 threshold, traders are closely monitoring technical signals, as a sustained break above this level could trigger a fresh wave of institutional investment.