Freddie Mac initiated with a Buy at BTIG

BTIG initiated coverage of Freddie Mac (FMCC) with a Buy rating and $20 price target. There’s been “healthy debate” around the potential for the GSEs to “raise capital,” which includes potentially monetizing portions of Treasury’s stock ownership in the GSEs, notes the analyst, whose view is that the GSEs will require some level of capital relief in order to support a modernization of technology. The firm especially sees the opportunity to create longer-term value from combining the tech capabilities within each Enterprise, namely by merging Freddie Mac’s underwriting mainframe with Fannie Mae’s (FNMA) mainframe, the analyst added.