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UBS widens '08 loss view for Freddie, slashes target

Thu Jul 10, 2008 11:04am EDT

(Reuters) - UBS widened its 2008 loss estimate for Freddie Mac and slashed its price target on the stock to $10 from $28 citing continued credit deterioration and the challenges of raising capital.

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The brokerage, which maintained its "neutral" rating on the stock, widened its 2008 loss view for the home finance company to $3.70 per share from 30 cents a share.

For 2009, it expects Freddie to earn $1.05 a share, down from its prior estimate of $1.95. Freddie Mac shares fell as much as 34 percent after former St. Louis Federal Reserve President William Poole was quoted in an interview with Bloomberg as saying that Freddie Mac and Fannie Mae are "insolvent" and may need a U.S. government bailout.

Freddie Mac shares were down $2.86 percent at $7.40 in morning trade on Nasdaq.

(Reporting by Esha Dey in Bangalore; Editing by Gopakumar Warrier)
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