Amid heightened geopolitical turmoil driven by the ongoing Iran conflict, billionaire investor Bill Ackman is making one of his most emphatic contrarian calls yet, arguing that few opportunities in today’s market are as compelling as Federal Home Loan Mortgage Corporation (FMCC), commonly known as Freddie Mac.
As risk-off sentiment and macro fears have pressured equities broadly, Ackman believes investors are overlooking a rare opportunity in the current valuation. He highlighted mortgage giants Federal National Mortgage Association (FNMA) and Freddie Mac as “stupidly cheap,” describing them as high-asymmetry bets with potential for 10x returns.
Echoing the sentiment, famed investor Michael Burry emphasized how rare such an opportunity is in the current market.
About Federal Home Loan Mortgage Corporation Stock
The Federal Home Loan Mortgage Corporation is a government-sponsored enterprise that plays a central role in the U.S. housing finance system by purchasing mortgages, packaging them into mortgage-backed securities, and providing liquidity to lenders. Headquartered in McLean, Virginia, the company has remained under federal conservatorship since the 2008 financial crisis, making its investment case highly sensitive to political and regulatory developments. Freddie Mac has a market cap of $4.1 billion.
The stock performance of Freddie Mac is marked by a sharp reversal from its 2025 highs into a deep 2026 sell-off as investor sentiment deteriorated. After rallying last year on optimism around potential privatization and a public offering, that narrative has faded amid rising uncertainty and a broader risk-off tone driven by geopolitical tensions linked to the U.S.-Iran war.
Year-to-date (YTD), FMCC is down 37.48%, making it one of the worst-performing policy-sensitive financial stocks.
Moreover, the stock has shown signs of extreme short-term volatility and dramatic spikes lately. On March 30, FMCC staged a rebound, surging as much as 47.3% intraday, its biggest single-day gain in over a decade, following bullish commentary from Bill Ackman. This was followed by a slight decline in the next session.
Overall, the stock is now up 11% over the past year. However, from its 52-week high of $14.99 in September 2025, FMCC is still down 57.7%, with the stock recently touching a 52-week low of $3.40 on March 19.
The stock is currently trading at a discount at 1.39 times sales compared to industry peers at 2.74 times .
Mixed Financial Performance
FMCC reported its fourth quarter and full-year 2025 financial results on Feb. 12. In the fourth quarter, Freddie Mac generated net income of $2.8 billion, representing a 14% year-over-year (YOY) decline from $3.2 billion in Q4 2024, as lower net revenues and a sharp swing in non-interest income weighed on results.
Net revenues came in at $5.8 billion, down from about $6.3 billion a year earlier, even as net interest income rose around 10% YOY, supported by continued mortgage portfolio growth and lower funding costs. Additionally, new business activity stood at $118 billion, up from $100 billion in the fourth quarter of 2024.
For the full year, Freddie Mac reported net income of $10.7 billion, a 10% decline from $11.9 billion in 2024, while net revenues fell 3% YOY to $23.3 billion. The company’s net interest income increased 8% to $21.4 billion, but non-interest income plunged 55% to $1.9 billion.
Analysts tracking FMCC project the company’s EPS to climb substantially YOY to $3.94 in fiscal 2026.
What Do Analysts Expect for Federal Home Loan Mortgage Corporation Stock?
Overall, FMCC has a consensus “Moderate Buy” rating. Of the five analysts covering the stock, three advise a “Strong Buy,” one analyst is on the sidelines and giving it a “Hold” rating, and one rates it as a “Moderate Sell.”
The average analyst price target for FMCC is $16.50, indicating a potential upside of 160.3%. The Street-high target price of $25 suggests that the stock could rally as much as 294.3%.
On the date of publication, Subhasree Kar did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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