FBR Capital Starts SLM Corp. (SLM) at Outperform
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FBR Capital initiates coverage on SLM Corp. (NASDAQ: SLM) with a Outperform rating and a price target of $13.00 and adds the stock to the FBR Alpha Generator list and removing HomeStreet, Inc. (NASDAQ: HMST).
Analyst Paul Miller commented, "SLM, also known as Sallie Mae, is the leading provider of private student loans with ~54% of total market share. Given SLM's dominant market position, the macroeconomic tailwinds supporting portfolio growth, the largely de-risked business model following the Navient spin-off and Trump victory/Republican sweep, and the strong operating leverage the company is able to achieve, we believe SLM should trade at a premium to other, more diversified private student lenders and more in line with high-growth, highly profitable banks. We view SLM as attractively valued, currently trading at 14.4x our FY17E core EPS. Our $13 price target assumes an 18.6x multiple on our FY17E core EPS of $0.70."
Shares of SLM Corp. closed at $10.07 yesterday.
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