Flagstar likely to see pressure on Mamdani primary win, says Citi

Citi analyst Benjamin Gerlinger believes Flagstar Financial (FLG) shares are likely to see downside pressure over the near-term following the Democratic primary results and Zohran Mamdani’s commanding lead in the ranked choice New York City governor primary. While concerns of a sweeping “freeze the rent” campaign promise potentially pulls forward incremental credit concerns, the actual fundamental impact to Flagstar is likely very minimal over the short- to medium-term, the analyst tells investors in a research note. Additionally, Citi continues to feel “comfortable” with Flagstar’s commercial real estate credit profile. However, it believes the shares are in a “prove it” position into the second half of 2025. The New York Citi primary results “could open the door to an even more attractive entry point in the very near future,” contends Citi. It keeps a Buy rating on Flagstar Financial with a $15.50 price target The stock in morning trading is down 4% to $10.64.