Friedman says Freddie Mac earnings under pressure until 2012

(Reuters) - Friedman Billings Ramsey said Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) will not realize meaningful earnings growth until 2012, at the earliest, and that the $5.5 billion capital raise it announced Wednesday will not be enough.

The brokerage said elevated credit cost will continue well into 2010 and 2011, as credit losses will continue to outpace earnings growth. It reiterated its "underperform" rating and $17 price target on the stock.

The second-largest U.S. home funding company will most likely have to continue to raise capital during the next few years to deal with both higher credit losses and the expected growth in its portfolios, Friedman said.

(Reporting by Ratul Ray Chaudhuri in Bangalore; Editing by Amitha Rajan)