Analysts at Keefe, Bruyette & Woods on Monday said the common shares of Fannie Mae and Freddie Mac are likely worthless even if the troubled mortgage-finance giants end up being recapitalized by the banking industry. KBW analysts led by Bose George downgraded shares of Fannie Mae /quotes/comstock/13*!fnm/quotes/nls/fnm (FNM 1.10, -0.02, -1.79%) and Freddie Mac /quotes/comstock/13*!fre/quotes/nls/fre (FRE 1.25, +0.01, +0.81%) to underperform from market perform and cut their price target on both stocks to zero from $1.
"In order for the government-sponsored entities to survive going forward, we believe they need to be recapitalized through investments from the banks that benefit from their role in the secondary market," KBW wrote in a research note. (more)
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