Analyst Mihir Bhatia from Bank of America Securities maintained a Buy rating on SLM and keeping the price target at $35.00.
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Mihir Bhatia has given his Buy rating due to a combination of factors that highlight SLM’s strategic positioning and growth potential. The company is focusing on capitalizing on changes in the Grad PLUS program, expanding its customer acquisition and engagement strategies, and leveraging private credit markets to drive sustainable earnings growth while reducing credit risk. These initiatives, combined with SLM’s strong market share and funding structure, contribute to attractive returns.
Additionally, SLM’s strategic partnership with KKR is expected to bolster its funding strategy, despite a short-term impact on earnings per share. Over the long term, this partnership is anticipated to enhance originations and generate fee-based income, supporting SLM’s alternative lending business. Furthermore, SLM aims to seize opportunities from legislative changes affecting Grad PLUS loans, potentially increasing origination volumes significantly. These strategic moves are expected to drive revenue growth and strengthen SLM’s market position, justifying the Buy rating.
In another report released today, Barclays also maintained a Buy rating on the stock with a $35.00 price target.