Freddie Mac Preferred Stock Price Targets Cut Sharply as MITT-C Draws High-Risk Warning

Analysts sharply reduced price targets on multiple Federal Home Loan Mortgage Corporation preferred share classes on November 2, with cuts ranging from 36% to over 40%. The average one-year target for FMCCK was lowered to $23.41 from $39.40, a drop of 40.59%, while FMCCJ was cut to $20.65 from $32.95, a reduction of 37.33%. FMCKM saw its target trimmed to $12.70 from $19.85, down 36.04% from an estimate set just 11 days earlier on October 22.

Separately, analysts flagged TPG Mortgage Investment Trust's preferred share class MITT-C as carrying elevated risk despite its attractive 11.54% stripped yield, which currently places it just inside the buy range. The security carries the highest risk rating of 5, driven by a weak common equity cushion and a low market cap to preferred ratio. Its floating rate structure pays a spread of 6.476% over SOFR, meaning dividend income will move with short-term interest rates rather than remaining fixed.