Barclays Reiterates an 'Overweight' on SLM Corp. (SLM); 3Q11 Initial Look - Solid Results, But Delinquencies Cause for Concern?
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Price: $27.28 -2.68%
Rating Summary:
13 Buy, 7 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
Rating Summary:
13 Buy, 7 Hold, 1 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 23 | New: 22
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Barclays reiterates an 'Overweight' on SLM Corp. (NYSE: SLM) price target of $18.00.
Barclays analyst says, "Despite the earnings beat, we believe delinquency trends (+30 bps q/q) could overshadow the strong results and lead the stock to underperform the market today. Delinquencies plus loans in forbearance as a percent of private loans in repayment increased 8 bps q/q to 15.0% following two years of steady declines. While some of the increase can be attributed to seasonal factors (and we believe management will emphasize this point) and 3Q NCOs were solid ($272M vs. $281M estimate), we are now incrementally more cautious on the credit outlook. However, given the significant portfolio burnout and run-off of non-traditional loans, we expect the overall trajectory of declining NCOs to remain intact and be a strong tailwind for earnings the next few years. With the stock trading at a 30% discount to our sum-of-the-parts valuation, we reiterate our rating."
For more ratings news on SLM Corp. click here and for the rating history of SLM Corp. click here.
Shares of SLM Corp. closed at $13.33 yesterday.
Barclays analyst says, "Despite the earnings beat, we believe delinquency trends (+30 bps q/q) could overshadow the strong results and lead the stock to underperform the market today. Delinquencies plus loans in forbearance as a percent of private loans in repayment increased 8 bps q/q to 15.0% following two years of steady declines. While some of the increase can be attributed to seasonal factors (and we believe management will emphasize this point) and 3Q NCOs were solid ($272M vs. $281M estimate), we are now incrementally more cautious on the credit outlook. However, given the significant portfolio burnout and run-off of non-traditional loans, we expect the overall trajectory of declining NCOs to remain intact and be a strong tailwind for earnings the next few years. With the stock trading at a 30% discount to our sum-of-the-parts valuation, we reiterate our rating."
For more ratings news on SLM Corp. click here and for the rating history of SLM Corp. click here.
Shares of SLM Corp. closed at $13.33 yesterday.
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