Positive Outlook on SLM’s Loan Portfolio Despite Seasonal Challenges

TD Cowen analyst Moshe Orenbuch has maintained their bullish stance on SLM stock, giving a Buy rating yesterday.

Moshe Orenbuch has given his Buy rating due to a combination of factors including the recent performance trends in SLM’s loan portfolio. Despite a slight increase in delinquencies compared to the seasonal average, the overall trend shows a decrease in delinquencies over the past two months, suggesting a potential improvement in the near future. Moreover, the management’s observation that the overall portfolio is outperforming the trust adds a positive outlook to the company’s financial health.
Additionally, while net charge-offs (NCOs) have seen a rise, the increase is partly attributed to seasonal factors such as borrowers exiting their grace periods. The expectation of an improving trend in NCOs, coupled with the management’s positive commentary, supports the Buy rating. The trust’s delinquency rates, although slightly higher than historical averages, are showing signs of stabilization, which further reinforces the positive recommendation.

In another report released yesterday, Wells Fargo also maintained a Buy rating on the stock with a $38.00 price target.

Based on the recent corporate insider activity of 67 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SLM in relation to earlier this year.