SLM downgraded to Equal Weight at Morgan Stanley on lack of clarity around EPS

As previously reported, Morgan Stanley analyst Jeffrey Adelson downgraded SLM (SLM) to Equal Weight from Overweight with a price target of $31, down from $36. While the firm says it had expected some near-term pressure to 2026 EPS, it was “surprised” by the magnitude of potential expense increase in Year 1 as SLM prepares for the forthcoming government pullback and PLUS opportunity and the potential magnitude of transitory impacts carrying beyond 2026 to 2027, the analyst tells investors. The potential for higher expenses and lack of clarity around forward EPS drives near-term execution risk, the analyst added.