Fannie Mae aims to double its earnings per share over the next five years, chairman and chief executive officer Franklin D. Raines said Thursday.

"Fannie Mae will continue to deliver double-digit earnings- per-share growth," and will "match or exceed the average 13.6% EPS growth over the past five years," he said.

Mr. Raines' bold talk won plaudits from analysts and investors at the company's biennial investor conference and lifted the stock 50 cents to $68.5625 on a bad day for financial stocks.

"It's a full percentage point of growth that I don't think the market has incorporated yet, so that's good news," said Salomon Smith Barney analyst Thomas O'Donnell.

"It's always encouraging to see management putting some stretch targets out there," said one institutional investor. Fannie has "the wherewithal to deliver double-digit earnings growth," he said, adding that its shares, and those of the rival government-sponsored enterprise, Freddie Mac, "look undervalued relative to the market."

Analysts noted moves by the government to tighten regulation of the government-sponsored enterprises and opposition within the mortgage industry to some of their expansion plans. But Mr. Raines said Fannie Mae would not be deterred. "We have a winning track record in managing political risk," he said.

In the 1990s, Fannie's share of the single-family mortgage market has grown to 23% from 14%, Mr. Raines noted, predicting it would approach 28% in five years.

The company's earnings growth will come from having plenty of room to expand its business, stable margins, effective risk management techniques, and a strong competitive ethic, Mr. Raines said.

Fannie has a market valuation of $70 billion-a jump of more than 50% in two years-and total capital of almost $17 billion, he said.

Jonathan E. Gray, an analyst at Sanford C. Bernstein, said Fannie's expansion goals imply that it will aggressively expand into new markets such as nonprime lending, which he said raises the possibility of higher credit losses.

Fannie's earnings estimate "is somewhat more optimistic than our current forecast," Mr. Gray said. He predicts that earnings-per- share growth will decelerate within two years to 10% to 11% for Fannie Mae and 13% for Freddie Mac-levels that he says are still likely to be better than growth in the S&P 500.

Mr. Gray is taking a "show-me" attitude, but agrees with the company's outlook at least for the next year. "The stock looks to be very undervalued given its growth potential," he said.

Mr. Raines' remarks took a decidedly aggressive tone concerning its main secondary market competitor, Freddie Mac, which boldly moved to gain market share recently by cutting a deal in which Norwest Mortgage will sell virtually all of its loans to Freddie Mac.

Mr. Raines vowed that Fannie would "vigorously defend" itself against any attempts to grab market share. "Today we make $1.7 billion more, our stock is worth $30 billion more, and our book of business is worth $300 billion more" than Freddie Mac's, he said. "So much for catching up."

"We did not do the Norwest alliance for market share," a Freddie Mac spokeswoman said. "The main driver was being able to take advantage of some market opportunities we saw that we felt could be mutually advantageous."

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