Analyst Reactions and Outlook
SLM Corp (SLM) released its fourth-quarter earnings report on Thursday, prompting analysts to adjust their price targets and offer their insights on the company's performance and future prospects.
SLM's fourth-quarter EPS of $0.50 missed analyst estimates of $0.55.
Net interest income of $362 million also fell short of the $373.96 million analysts expected.
The company expects fiscal 2025 EPS of $3.00-$3.10, slightly below the $3.35 analyst estimate.
SLM anticipates non-interest expenses of $655 million-$675 million.
Keefe, Bruyette & Woods: Analyst Sanjay Sakhrani maintained a "Market Perform" rating with a price target of $30. He noted that the EPS miss was driven by higher provisions and lower net interest income, partially offset by lower expenses and a lower tax rate.
Analyst Jon G. Arfstrom reiterated an "Outperform" rating and raised the price target to $32 from $30. He highlighted the company's substantial loan growth, modest margin reduction, and decreased expense levels.
Analyst Richard Shane maintained a "Neutral" rating but raised the price target from $29 to $30. He acknowledged the elevated provision expense but noted that the company's 2025 guidance met expectations.
Analysts generally expressed cautious optimism about SLM's future. They pointed to the company's solid origination growth, manageable expense levels, and plans to sell $2 billion in loans in the first quarter of 2025 as positive factors. However, some concerns remain regarding potential reserve build-up due to exceeding the long-term balance sheet growth framework.
SLM stock was down 0.27% at $29.22 at the time of the report.