Tuesday, analysts at TD (TSX:TD) Cowen showed a positive outlook on SLM Corp. (NASDAQ: NASDAQ:SLM), increasing the price target to $27 from $25 while keeping a Buy rating on the stock. The firm's analysis points to an expected growth in SLM's market share in the private student loan sector, bolstered by rising enrollments.
SLM Corp. is recognized for originating high-quality loans, with an average FICO score of 748 and 91% of the loans being cosigned. The analyst predicts that the company's improving GoS margins will enable it to sell more loans, which in turn will drive higher capital returns.
The firm anticipates that SLM will demonstrate consistent earnings per share (EPS) growth and robust capital returns. Additionally, it is expected that starting in 2025, balance sheet growth will contribute to an enhanced valuation for the company.
The positive assessment reflects the company's strong position in the market and its potential for continued financial success. The upgraded price target suggests confidence in SLM's strategy and future performance.
InvestingPro Insights
As SLM Corp. (NASDAQ: SLM) garners a favorable outlook from analysts, real-time data from InvestingPro provides additional insights into the company's financial health and market performance. With a solid market capitalization of $4.66 billion and a compelling price-to-earnings (P/E) ratio of 6.53, SLM's valuation metrics are attractive. The adjusted P/E ratio for the last twelve months as of Q1 2024 stands at an even more appealing 6.34, indicating potential undervaluation relative to earnings.
InvestingPro Tips highlight that SLM's management has been actively engaged in share buybacks, a move that can signal confidence in the company's future prospects and a commitment to delivering value to shareholders. Additionally, the company boasts a high shareholder yield, reinforcing its appeal to investors seeking income as well as growth.
For readers interested in a deeper dive into SLM's financials and future outlook, there are additional InvestingPro Tips available at https://www.investing.com/pro/SLM. Plus, don't miss out on the chance to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription with the coupon code PRONEWS24.
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