Wedbush downgrades Fannie Mae with IPO momentum ‘stalled’

Wedbush analyst Michael Piccolo downgraded Fannie Mae (FNMA) to Neutral from Outperform with an unchanged price target of $8. The company’s Q1 results were modestly below expectations with the headline being expense discipline, the analyst tells investors in a research note. The firm says that while the political momentum towards an initial public offering or recap and release has “arguably stalled” until after the midterms, Fannie is making favorable progress at improving efficiency and building capital. Wedbush cites valuation for the downgrade.