Moshe Orenbuch, an analyst from TD Cowen, reiterated the Buy rating on SLM. The associated price target was raised to $40.00.
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Moshe Orenbuch’s rating is based on several strategic developments at SLM that indicate potential for future growth. Despite a recent earnings miss attributed to higher provisions and macroeconomic factors, SLM is expected to benefit significantly from changes in its Plus program. The company anticipates an additional $4.5 billion to $5.0 billion in loan originations from Grad PLUS and Parent PLUS loans, which are projected to contribute positively to earnings in the coming years.
Furthermore, SLM’s recent sale of $1.8 billion in private student loans has freed up substantial capital, which is likely to be used for stock buybacks. This move not only enhances shareholder value but also strengthens the company’s financial position. The combination of these factors, including the conservative underwriting approach and the potential for increased loan volume, supports the Buy rating as SLM is positioned for long-term growth and profitability.
In another report released today, Barclays also maintained a Buy rating on the stock with a $43.00 price target.