Keefe Bruyette lowered earnings estimates for Fannie Mae (FNMA) and Freddie Mac (FMCC) by 10%, anticipating $26B in combined earnings pro forma. The companies earn roughly a 65 basis point guarantee fee but pay 10 points to Treasury under the Temporary Payroll Tax Cut Continuation Act. Keefe sees downside to common shares unless privatization succeeds. Underperform ratings with $4 target for Fannie and $4.50 target for Freddie.

Read more at Yahoo Finance: Keefe cuts Fannie, Freddie earnings estimates by 10%